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decisions. Although Mr. Thompson's testimony regarding profit
motive was favorable to the test case petitioners' cause, Judge
Goffe rejected his testimony as vague and unsupported by the
record. Because Judge Goffe rejected the testimony of all the
test case petitioners in holding that they had not entered into
the Kersting transactions with a business purpose, we are
convinced that Mr. Thompson's testimony was not material to Judge
Goffe's holding on the point.
Judge Goffe also held that the test case petitioners had
failed to prove that the Kersting transactions had economic
substance beyond the creation of tax benefits. In particular,
Judge Goffe focused on the manner in which Mr. Kersting actually
operated the programs, the lack of corporate profitability or
shareholder profitability, the absence of any evidence or
likelihood that Kersting program participants were or would ever
be in a position to sell their stock at an increased value
relative to the purchase price of the stock, and Mr. Kersting's
routine disregard of standard corporate practices. Because Judge
Goffe focused on the manner in which Mr. Kersting actually
operated the programs, we are convinced that Mr. Thompson's
testimony was not material to Judge Goffe's holding that the
programs lacked economic substance.
ii. Lack of Genuine Debt/Waltz of Funds
Judge Goffe relied upon the specific language of the stock
subscription agreements underlying the Stock Subscription Plan
and the Leasing Corporation Plan to conclude that the agreements,
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