- 7 -
In summary, presented to us in this case is a
chain or multilayered series of obligations, stacked or
multiplied on top of each other via the numerous
partnerships to produce debt obligations in staggering
dollar amounts, using a largely undeveloped and
untested product, in a highly risky, very speculative,
and nonarm's-length manner in an attempt to generate
significant tax deductions for investors. The
transactions did not, and do not, constitute legitimate
for-profit business transactions. [Id. at 175-176.]
Based on our findings and opinion in Krause v. Commissioner,
supra, the affirmance thereof by the U.S. Court of Appeals for
the Tenth Circuit, and the denial of certiorari by the U.S.
Supreme Court, thousands of investors who had invested in
Technology-1980 and in other related limited partnerships,
including Cromwell, settled their Federal income tax liabilities
with respondent relating to these investments. Petitioners
herein and respondent, however, have not been able to reach a
settlement agreement, and petitioners allege the existence of
material facts that they believe distinguish their limited
partnership investments in Cromwell from the investments that
were made by the taxpayers in Technology-1980 and that were
specifically addressed in Krause v. Commissioner, supra.
We issued a show cause order, and we held an evidentiary
hearing in connection with our show cause order to give
petitioners an opportunity to establish how, for Federal income
tax purposes, their limited partnership investments in Cromwell
and how the activities of Cromwell are distinguishable from the
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