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the covenant not to compete had no basis in reality. As
described above, we sustained respondent's determination
as a matter of fact. Petitioners do not explain what
"expertise" petitioner supplied. Moreover, petitioner
testified that he did not have experience working with
covenants not to compete. Furthermore, contrary to
petitioners' assertion that there is "substantial
authority" for the subject deductions, there is no
authority of any kind to claim amortization deductions
with respect to a covenant not to compete that lacks
economic reality.
Based on the foregoing, we sustain respondent's
determinations pertaining to the section 6662 penalty.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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