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over to Royal Bank; (3) on June 30, 1993, ITC purportedly bor-
rowed $20 million from Royal Bank; (4) on June 30, 1993, ITC
purportedly used that $20 million to make a payment to petitioner
on an outstanding loan from petitioner to ITC; (5) on June 30,
1993, petitioner purportedly used the $20 million that it re-
ceived from ITC in order to make a purported purchase of ITC’s
preferred stock; (6) on July 2, 1993, the next bank business day
after June 30, 1993, petitioner purportedly lent ITC the $20
million that it received from ITC on June 30, 1993, in the
purported redemption of ITC’s preferred stock;20 and (7) on July
2, 1993, the next bank business day after June 30, 1993, ITC
repaid the $20 million that it purportedly borrowed from Royal
Bank on June 30, 1993.
On the record before us, we find that petitioner has failed
to carry its burden of proving that it adequately disclosed
within the meaning of section 6662(d)(2)(B)(ii), the regulations
thereunder, and Revenue Procedure 94-69 the relevant facts
affecting the tax treatment of the disputed transaction in
petitioner’s 1993 return or in the October 11, 1996 disclosure
letter. Assuming arguendo that we had found that the disputed
transaction was not a tax shelter within the meaning of section
20As noted above, the purported redemption of ITC’s pre-
ferred stock was disclosed in the October 11, 1996 disclosure
letter. However, none of the remaining steps of the disputed
transaction was disclosed in that letter.
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