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proceeding. First, petitioners are estopped by the duty of
consistency from claiming that Mr. Blonien was not a partner in
Finley Kumble for Federal income tax purposes. Because of Finley
Kumble’s poor financial performance, petitioners reported as
income on their 1987 Federal income tax return far less than the
amount of money Mr. Blonien actually received from Finley Kumble.
Mr. Blonien received more than $64,000 in draws from Finley
Kumble in 1987. See supra note 3. Petitioners reported Mr.
Blonien’s distributive share of Finley Kumble’s partnership
income on Schedule E as only $15,310. In addition, petitioners
reported and claimed a partnership loss from Finley Kumble of
$106 for the year 1988, a year for which he also reported
substantial partnership income from Whitman & Ransom.
After receiving tax benefits by taking the position on their
Federal income tax returns that Mr. Blonien was a partner in
Finley Kumble in prior years, petitioners attempt to avoid
recognizing Mr. Blonien’s share of Finley Kumble’s COD income by
contending for 1992 that Mr. Blonien was merely an employee of
Finley Kumble. Petitioners want the benefits of Mr. Blonien’s
being a partner in earlier years without subjecting themselves to
the burdens of his being a partner in the later year at issue.
As Justice Brandeis stated in his seminal concurring opinion in
Ashwander v. TVA, 297 U.S. 288, 348 (1936): “The Court will not
pass upon the constitutionality of a statute at the instance of
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