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In other words, the taxpayers in Norgaard met their burden by
convincing the Court that their accounting system was reasonable
under the circumstances, and petitioner must show that his
approach here was, in a like manner, reasonable.
Petitioner has conceded the income tax deficiencies,
agreeing that the facts and conclusions of Schillinger v.
Commissioner, T.C. Memo. 1990-640, control that aspect of the
case. In Schillinger, we found that the energy device which the
taxpayers claimed had a cost of $80,000 in fact had a fair market
value of $1,000. In addition, we found that the taxpayer in
Schillinger invested in the energy-device leasing program solely
to gain a tax advantage and not to earn an economic profit.
Here, petitioner claims to have invested for retirement
purposes and that his primary motivation was not the related tax
benefits. Petitioner's actions, however, do not support his
claim. Petitioner, during his trial testimony, exhibited an
understanding of the details and operation of the energy-device
leasing transaction. He understood that he had no obligations
beyond the front-end payment of the amount of his investment and
consulting fees of Professional. Moreover, petitioner knew that
the cost of his investment would be funded by the refund of taxes
already paid. In this regard, petitioner netted and received
more than $3,000 in excess of his expenditure to become involved
in the transaction.
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