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The evidence in the record does not support a finding that
Sav-Fuel was operated in a businesslike manner. Other than the
PPM, no books, records, or financial statements for Sav-Fuel were
offered into evidence by petitioner, and it is unclear whether
any existed. Petitioner contends he believes that the EMS was
installed at Gould’s manufacturing plant and produced substantial
energy savings, but he is not sure. There is no evidence in the
record that Messrs. Frost and Gangel had any previous involvement
with energy savings activities other than the similar EMS tax
shelters in Gianaris v. Commissioner, T.C. Memo. 1992-642, and
Gangel v. Commissioner, T.C. Memo. 1991-358.
There is no evidence indicating how much time and effort was
expended in carrying on the EMS-related activity. The evidence
in the record does not demonstrate that it was reasonably
expected that the EMS would appreciate in value, and as
previously discussed, the record indicates that the purchase
price for the EMS was grossly inflated. There is no evidence
that Sav-Fuel had any previous experience in similar activities.
Indeed, like Nisona and Dard, Sav-Fuel was formed only shortly
before the purported transactions occurred. There is no evidence
that Sav-Fuel ever earned profits from the EMS-related activity.
The above facts again demonstrate that the requisite profit
objective was lacking.
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