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disregarded for Federal income tax purposes. Petitioner bears
the burden of proof. Rule 142(a); Brown v. Commissioner, 85 T.C.
968, 998 (1985), affd. sub nom. Sochin v. Commissioner, 843 F.2d
351 (9th Cir. 1988).
I. Partnership Status Under Statutory and Case Law
Petitioner first contends that Saba and Otrabanda qualify as
partnerships for Federal income tax purposes consistent with the
statutory definitions of partnerships (and partners) set forth in
sections 704(e), 761, and 7701(a)(2), and in accordance with
Supreme Court decisions in cases such as Commissioner v. Tower,
327 U.S. 280 (1946), and Commissioner v. Culbertson, 337 U.S. 733
(1949). Petitioner avers that “a person should be treated as a
partner when he or she owns capital in a partnership in which
capital is a material income-producing factor, without regard to
whether the partnership was formed to avoid tax.”
We need not dwell on this argument because the Court of
Appeals did not direct us to evaluate the technical compliance of
the partnerships. Instead, the Court of Appeals directed us to
consider whether the partnerships should be recognized at all for
Federal income tax purposes consistent with the standards the
Court articulated in ASA Investerings Pship. v. Commissioner, 201
F.3d 505 (D.C. Cir. 2000), affg. T.C. Memo. 1998-305. We were
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