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The notice of deficiency disallowed losses claimed by petitioners
from Opal Leasing on the ground that petitioner was not "at risk"
within the meaning of section 465 with respect to his investment
in the partnership.
Petitioners filed their petition with this Court on
September 8, 1986. Subsequently, on March 4, 1988, they signed a
Form 906, "Closing Agreement on Final Determination Covering
Specific Matters". The form was signed by the IRS
representative, Associate Chief, NYC Appeals, on March 24, 1988.
Under the closing agreement, petitioners were entitled to an
ordinary deduction from taxable income for 1980 in the amount of
$6,027, "being equal to 100% of taxpayer's investment in the
partnership". The agreement further provided that petitioners
were not entitled to any deductions of losses or credits in
connection with Opal Leasing for any other taxable year. Also,
petitioners would not be liable for additional interest under
section 6621(c) or for any additions to tax on any portion of any
deficiency arising under the closing agreement.
The IRS did not immediately implement the closing agreement.
Meanwhile, there was pending in this Court a tax shelter case
involving facts similar to those present here, Thornock v.
Commissioner, 94 T.C. 439 (1990). In that case this Court found
that, as here, the initial nonrecourse financing, the guarantees
made to the partners by other participants in the transaction,
together with other features of the transaction, such as the
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