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order to leave petitioner with deductions of more than $4.2
million. Petitioner sought to claim these tax benefits because
it was unable to sell the deal to others because of the IRS’s
October 30, 1995, issuance of Notice 95-53, 1995-2 C.B. 334,
warning of the IRS’s intention to challenge and disallow tax
benefits claimed under lease strip deals.
Petitioner contends that this case is “fact driven, and this
Court must ultimately decide whose version of the facts is
correct.” Petitioner argues that it was in the business of
structuring leasing transactions and that the two lease strip
deals under consideration did not differ from and were typical of
contemporaneous lease strip deals. Finally, petitioner argues
that it was genuinely motivated to seek a pretax economic profit.
In effect, petitioner asks this Court to accept its version
of the facts, including the premise that the second lease strip
deal employs the same form as similar lease strip deals being
conducted at that time. It is well settled that the mere
execution of documents assigning labels to aspects of a
transaction does not automatically result in their being
respected for tax purposes. Similarly agreements which, on their
face, formally comply with the requirements of a statute do not
give substance to a transaction which in reality has no economic
substance. See Gregory v. Helvering, 293 U.S. at 468. We must
decide whether what was done, apart from the tax motive, was what
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