Glenn A. Cullin; Juanita M. Cullin, Petitioners-appellants, v. Commissioner of Internal Revenue, Respondent-appellee, 980 F.2d 729 (6th Cir. 1992)

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US Court of Appeals for the Sixth Circuit - 980 F.2d 729 (6th Cir. 1992) Dec. 9, 1992

Before MILBURN and BATCHELDER, Circuit Judges, and LIVELY, Senior Circuit Judge.


Petitioners appeal from the Tax Court's determination that they are liable for deficiencies and penalties resulting from their investment in a tax shelter that lacked economic substance. This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination, this panel unanimously agrees that oral argument is not needed. Fed. R. App. P. 34(a). Both parties have expressly waived oral argument.

On appeal, this case was held in abeyance pending this court's decision in Illes v. Commissioner, No. 91-2412 (6th Cir. September 21, 1992) (per curiam) (unpublished) which involved virtually identical arguments and involved the same tax shelter. As in Illes, petitioners' contention herein that a loss deduction under I.R.C. § 165(c) (2) is permissible is without merit because they stipulated that the shelter lacked economic substance. See Rose v. Commissioner, 868 F.2d 851, 853 (6th Cir. 1989); Mahoney v. Commissioner, 808 F.2d 1219, 1220 (6th Cir. 1987). Likewise, petitioners' contention that negligence penalties imposed under I.R.C. § 6653(a) (1) are improper is without merit because they cannot show that the Tax Court's conclusion that they were negligent is clearly erroneous. See Leuhsler v. Commissioner, 963 F.2d 907, 910-11 (6th Cir. 1992).

Therefore, the judgment of the Tax Court is hereby affirmed pursuant to Rule 9(b) (3), Rules of the Sixth Circuit.