- 20 -
reported on Madison’s 1982 return. Shortly thereafter,
petitioner received a copy of the NBAP from Mr. Roberts.
Petitioner also received a letter from Mr. Roberts informing him
that Madison would keep him advised of all pertinent developments
regarding the audit and related matters. Petitioner showed the
letter to his tax return preparer.
On December 24, 1987, respondent issued to Madison a Notice
of Final Partnership Administrative Adjustment (FPAA) for 1982
and 1983. Petitioner received a copy of the FPAA.
In the FPAA, respondent adjusted both the investment tax
credit and business energy investment credit property basis from
the $7 million Madison had reported to zero and explained that
“The investment tax credit and the business energy investment
credit in the amount of $7,000,000.00 for the year 1982 is
disallowed because you have not established the amount, if any,
of qualified investment and the extent, if any, of entitlement to
the credit.” In the Explanation of Partnership Adjustments
accompanying the FPAA, respondent further explained:
All items of income, loss deductions and credits
reported with respect to your equipment leasing
activities for the years 1982 and 1983 are disallowed.
For purposes of federal income taxation you cannot be
considered the owner or lessee of the equipment with
respect to which said items of income, loss, deductions
and credits are reported because, after examination of
all of the facts and circumstances, you are found not
to have incurred the benefits and burdens of ownership
or lease of the equipment or to have made, in
substance, a true economic investment in the equipment.
The transactions entered into with respect to you [sic]
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011