-21-
Petitioner seeks a contrary result, relying upon Transpac
Drilling Venture 1982-12 v. Commissioner, 147 F.3d 221 (2d Cir.
1998). There, the Court of Appeals for the Second Circuit held
that extensions signed by TMPs who were cooperating witnesses in
a criminal tax and related grand jury investigation of the
promoter of the Transpac partnerships were invalid. The court
held that the TMPs were under a disabling conflict between their
personal interests as immunized cooperating Government witnesses
and their duties to the limited partners they purported to
represent. The court noted that the nature of the conflict was
obvious and known by the Commissioner.
The facts here do not support a finding that Steele was
under a disabling conflict when he signed the consents. In
Madison Recycling Associates v. Commissioner, 295 F.3d 280 (2d
Cir. 2002), the Court of Appeals for the Second Circuit
distinguished Transpac Drilling Venture 1982-12 v. Commissioner,
supra, and indicated that a disabling conflict of interest is not
necessarily present merely because a TMP is under criminal
investigation. See Madison Recycling Associates v. Commissioner,
supra at 288 (“Our decision in Transpac was based on * * * an
actual conflict. We did not hold that the existence of a
5(...continued)
approximately 10-year period from Nov. 18, 1986, through Sept.
23, 1996, it appears that his signing of the consents was merely
a matter of routine rather than, as petitioner would have us
find, a quid pro quo furthering Steele’s self-interests.
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