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case, this Court followed the analysis of the Court of
Appeals for the Eighth Circuit, the governing circuit, in
McNamara v. Commissioner, 236 F.3d 410 (8th Cir. 2000),
revg. and remanding Bot v. Commissioner, T.C. Memo. 1999-
256, Henner v. Commissioner, T.C. Memo. 1999-306, and
McNamara v. Commissioner, T.C. Memo. 1999-333, and held that
there was no nexus between the rental payments at issue and
the oral agreement between the taxpayers and their farm
corporation under which the taxpayers were to materially
participate in the corporation’s production of agricultural
commodities.
Discussion
According to petitioners, the decision of this Court
in Johnson v. Commissioner, supra, “dictates that Curtis
and Mary Ettesvold do not owe the additional self-employment
taxes that were assessed against them by the Internal
Revenue Service.” Accordingly, they contend that they are
to be treated as the “prevailing party”, pursuant to section
7430(c)(4)(E), on the ground their tax liability is “less
than the ‘qualified offer’ that they offered to the Internal
Revenue Service.” Petitioners further assert that they had
exhausted their administrative remedies available within
the Internal Revenue Service, that they had not unreasonably
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