- 12 -
and a notice of final partnership administrative adjustment
(FPAA) was ultimately issued to the partnership. In December
1991, Alfred M. Clancy (Mr. Clancy), the general partner and tax
matters partner of San Nicholas, commenced a TEFRA partnership
proceeding in this Court.10 Subsequently, in November 1993, Mr.
Clancy and the Commissioner agreed to be bound by the decision to
be entered in Utah Jojoba I Research v. Commissioner, docket No.
7619-90, a TEFRA partnership proceeding involving Utah Jojoba
that had previously been commenced by petitioner in his capacity
as tax matters partner of that partnership.
In Utah Jojoba I Research v. Commissioner, T.C. Memo. 1998-
6, the Court made detailed findings of fact related to the jojoba
limited partnerships,11 petitioner, U.S. Agri, and Mr. Pace. The
Court described the R&D contract between the partnerships and
U.S. Agri as “mere window dressing” and held that the
partnerships did not, directly or indirectly, engage in research
or experimentation and that the partnerships lacked a realistic
prospect of entering into a trade or business. In upholding the
10 The TEFRA partnership proceeding was assigned docket No.
29994-91. TEFRA stands for the Tax Equity and Fiscal
Responsibility Act of 1982, Pub. L. 97-248, 96 Stat. 648. See
secs. 6221-6232; N.C.F. Energy Partners v. Commissioner, 89 T.C.
741, 744 (1987); Maxwell v. Commissioner, 87 T.C. 783, 789
(1986).
11 At least 18 docketed cases were bound by stipulation to
the outcome of Utah Jojoba I Research v. Commissioner, docket No.
7619-90.
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