Edward A. Wagner - Page 2

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          Wagner (petitioner) is liable for the fraud addition to tax for             
          the year in issue.  After concessions, the sole issue for                   
          decision is whether we should conclude, as a matter of law, that            
          petitioner is liable for the section 6653(b) addition to tax for            
          fraud for the taxable year 1975.                                            
               The facts set forth in the Background portion of this                  
          Opinion are stated solely for the purpose of deciding the motion            
          and are not findings of fact for this case.  Fed. R. Civ. P.                
          52(a); Boyd Gaming Corp. v. Commissioner, 106 T.C. 343, 345 n.5             
          (1996); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520                  
          (1992), affd. 17 F.3d 965 (7th Cir. 1994).                                  
               On May 26, 1982, a grand jury convened in the U.S. District            
          Court for the Southern District of New York indicted petitioner             
          and three alleged coconspirators for various crimes.  The                   
          indictment described a scheme, as summarized below, to establish            
          fraudulent tax shelters through the creation of limited                     
          partnerships, including Caldwell Properties (Caldwell), whose               
          funds, contributed by individual investors solicited by the                 
          defendants, were used to finance the purchase of movie rights.              
          The tax deductions and credits to which the investor-partners               
          thereby ostensibly became entitled were grossly inflated by the             
          reporting of purchase prices for the movies that greatly exceeded           
          the prices actually paid by the purchasers.  To perpetrate the              

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