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We are not persuaded otherwise by petitioners' further
argument that respondent has made a number of "concessions" in
the stipulations of settled issues. Petitioners claim that these
concessions require respondent to concede that the interest
expenses at issue are deductible. Respondent counters that the
alleged "concessions" merely reflect this Court's holdings in the
Seykota opinions. The record before us in these fully stipulated
cases does not support petitioners' assertions. Suffice it to
say that petitioners have not shown that the claimed concessions
operate to confer economic substance upon the transactions at
issue. On this record, those transactions are indistinguishable
from those we found to lack economic substance in Seykota II.
Accordingly, the interest generated by those transactions is not
deductible.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
(...continued)
but also other deductions for items such as management fees or
storage charges. However, neither here, nor in Seykota, have
taxpayers proven that the existence of such other deductions make
the underlying obligation one of economic substance "that can be
separated from the underlying * * * scheme". United States v.
Wexler, 31 F.3d 117, 125-126 (3d Cir. 1994).
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