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In Saba II, the Court of Appeals vacated and remanded these
cases
for reconsideration in light of our recent decision in
ASA Investerings Partnership v. Commissioner, 201 F.3d
505 (D.C. Cir. 2000) [affg. T.C. Memo. 1998-305], where
we invalidated what appears to be a similar-–perhaps
even identical-–tax shelter on the grounds that the
entire partnership, not merely the specific
transactions at issue, was a sham for federal tax
purposes. [Saba II, 273 F.3d at 1136.]
The Court of Appeals also stated that a remand to this Court was
appropriate because
in presenting its case in the Tax Court, Brunswick may
have acted on the mistaken belief that the Supreme
Court’s decision in Moline Properties, Inc. v.
Commissioner, 319 U.S. 436, 63 S.Ct. 1132, 87 L.Ed.
1499 (1943), established a two-part test under which
Saba and Otrabanda must be respected simply because
they engaged in some business activity, an
interpretation that ASA squarely rejected, see ASA, 201
F.3d at 512 * * *. [Saba II, 273 F.3d at 1141.]
At the time of trial in these cases, the parties entered
into a series of stipulations of facts. All stipulated facts and
exhibits are incorporated herein by this reference. We also
incorporate by reference all our findings of fact in Saba I. (For
convenience, all citations of Saba I will include citations of
the specific page(s) of the Court’s slip opinion.)
After these cases were remanded, the parties filed opening
briefs and reply briefs addressing the issues raised by the Court
of Appeals.
Pursuant to the Court of Appeals’ mandate, we consider
whether Saba and Otrabanda are sham partnerships that should be
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Last modified: May 25, 2011