United States' Motion to Exclude Expert Testimony of Plaintiffs'
United States' Motion to Exclude Expert Testimony of Plaintiffs'
United States' Motion to Exclude Expert Testimony of Plaintiffs'
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ANALYSISINTRODUCTIONDubinsky's "OPINION NO.1" is thatBeal's so-called "investment" strategy wasin reality a pre-planned, permanent taxelimination strategy involving the use <strong>of</strong>digital foreign currency "swaps" as anartifice <strong>to</strong> generate artificial paper taxlosses. The so-called "investment" strategylacked true economic substance. (Dubinskyat 3.)Dubinsky gives, as the "BASIS FOR OPINION NO.1," a list <strong>of</strong>eight assertions, as follows:1. Explanation <strong>of</strong> the Deal (Id. at 3-15)2. The Long and Short "Swaps" in Substance Should Be Viewed asa Single Economic Transaction (Id. at 15-19)3. There was No Reasonable Opportunity <strong>to</strong> Earn a ReasonableNon-Tax Pr<strong>of</strong>it From the "Swaps (Id. at 19-21)4. (Bemont) Lacked Any Non-Tax Business Purpose that Could NotHave Been Fulfilled by BPB (Id. at 21-23)5. Montgomery's Pre-planned "Partnership" Interest in (Bemont)Had No Real Economic Substance (Id. at 23-24)6. Beneficial Property's "Partnership" Interest in BPB Had NoEconomic Substance and Only .Served <strong>to</strong> Make Beal' s TaxLosses Less Apparent on His Tax Returns (Id. at 24-26)7. There Was No Apparent Business Purpose in (Bemont)' sPurchase <strong>of</strong> 165,000 Shares <strong>of</strong> Solution 6 S<strong>to</strong>ck (Id. at 26-27 )8. Beal's Tax Strategy Was a Pre-Planned Series <strong>of</strong> Tightly-Choreographed, Interdependent Financial Transactions Wiredin Step Fashion, With All the Characteristics <strong>of</strong> a Son-<strong>of</strong>-Boss Transaction Described in IRS Notice 2000-44 (Id. at27-31)- 3 -