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any reason why petitioners should be prohibited from
recharacterizing the management fees deduction as nonpassive in
order to accurately reflect the economic significance of the
transaction. Indeed, respondent does not dispute that
disallowing self-charged treatment for the management fees would
result in the very mismatching that Congress sought to alleviate
by directing the Secretary to issue regulations for self-charged
transactions. Nor has respondent identified a distinction
between lending and nonlending transactions in the context of
this case that would lead us to conclude that the two
transactions should be treated differently under the self-charged
regime.
We have considered all other arguments advanced by the
parties, and to the extent we have not addressed these arguments,
consider them irrelevant, moot, or without merit.9
To reflect the foregoing,
Decision will be entered for
petitioners.
9 Because of our conclusion that petitioners are entitled to
self-charged treatment with respect to the management fees, we
find it unnecessary to address their alternative argument that
the partnerships properly reported two activities to petitioner
(or to the upper tier partnerships or S corporations).
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