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Brunswick paid ABN fees in exchange for its participation in the
partnerships. Respondent contends that the absence of an
explicit agreement regarding ABN’s fees merely reflects
Brunswick’s strict adherence to the warning in the January 26,
1990, memorandum prepared by Judith P. Zelisko, Brunswick’s
Director of Taxes, hereinafter the Zelisko memorandum, that
“there cannot have been any agreements, negotiations, or
understandings of any kind among the Partners”. Saba I, slip op.
at 15-18 (quoting the pertinent portions of the Zelisko
memorandum).
We acknowledge that the record in these cases does not
include an explicit agreement that Brunswick would pay ABN a
specific fee in exchange for its participation in the
partnerships. Nor does the record include a detailed calculation
of such fees. However, the record contains compelling
circumstantial evidence that Brunswick transferred fees to ABN in
exchange for its participation in the partnerships. In ASA
Investerings Pship. v. Commissioner, 201 F.3d at 514, the Court
of Appeals relied upon similar evidence to infer that
AlliedSignal made transfers to ABN pursuant to a prearranged
agreement to compensate ABN for its funding costs.
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Last modified: May 25, 2011