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loans, or records establishing the existence or actual location
of the equipment at any time during the subject leases. The
inference to be drawn from IRA's failure to produce or present
these critical documents is that such materials never existed or,
if they did exist at one time, their production would have
provided evidence unfavorable to IRA's positions. See Wichita
Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946),
affd. 162 F.2d 513 (10th Cir. 1947).
Moreover, a review of the 28 exhibits related to these
transactions indicates that they all followed the identical
format and utilized the same form documents as the other
transactions discussed at length.
As with the other computer leasing transactions at issue
here, these seven transactions utilized invalid debt because the
long-term "limited recourse" promissory notes effectively
shielded IRA from ever having to make any payments on the notes.
Although the specific deferral provisions were eliminated from
these notes--presumably in response to challenges thereto by
respondent in connection with earlier (i.e., 1976 through 1980)
transactions--each of the long-term "limited recourse" promissory
notes contained the same provisions with respect to the limited
liability of IRA. Section 10 ("Limited Recourse") sets forth
IRA's "Recourse Obligations" and basically states that
IRA/Cedilla Invest. is only personally liable to the extent of
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