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Arivada was a sham and that it lacked economic substance, and
therefore that the amounts paid to Arivada of $62,989 for 1993
and $78,772 for 1994 are taxable income to petitioner.
II. OPINION
A. Procedural Issues
1. Whether Petitioner Was Denied an Opportunity To Conduct
Discovery
Petitioner contends that he did not have enough time to
conduct discovery because the case was being considered by the
IRS Appeals Office until 20 days before the session for which the
case was set for trial. We disagree. The fact that petitioner’s
case was being considered by Appeals did not limit his ability to
seek discovery. Rule 70(a)(2).
2. Whether We Have Jurisdiction After the Bankruptcy Court
Lifted the Automatic Stay
On the first day of the session of this Court at which this
case was calendared for trial, petitioner filed a petition for
relief under chapter 13 of the Bankruptcy Code with the United
States Bankruptcy Court for the District of Arizona. Once a
taxpayer files a petition in bankruptcy, the automatic stay of 11
U.S.C. section 362(a)(8) (1994) bars the commencement or
continuation of proceedings against the debtor in the Tax Court.
The bankruptcy court may lift the automatic stay of 11 U.S.C.
section 362(a)(8) (1994). See 11 U.S.C. sec. 362(d), (e), and
(f) (1994). The next day, respondent filed a motion to lift the
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