opponents are contesting the tax court's methodology of computing they allowed to die actions as well as its treatment of payments that were made by one of the chair holders on its behalf met the substantiation requirements and were entitled to the doctrines well your theory of the case seems to be that g l aviation had an agreement with thanks tram stating that in return for twenty four hour access to the aircraft say there was an agreement between the partnership i didn't see that can you point me to where i don't know that there's a specific that he testified specifically there was an agreement but there's  i think that the testimony is susceptible of saying yes it wasn't removed because cross examination by the government mr lack testified that he would decide how much cash needed to  based its decision on lack of substantiation is that correct a part of it yes your honor well did they say that there were was there a conclusion by the tax court that the expenses were not ordinary or necessary i didn't see that the  case so if it's lack of substantiation and that it's looking at the deductions then you have the burden on that right correct ok and so they're you know you're taking fault with some of the things of the way that the tax court looked at things and did that but when you time you have the burden and lack of substantiation you know that sometimes that instance you know require some sort of deference to the trier of fact and there were a couple of things that i believe that the tax court noted or that was in the record the things that there was not contemporaneously made records and so that was one thing that the tax court looked at and then i think from also made a concession that they should not have claimed its payments for the use of the luxury suite as travel expenses so the tax court can kind of factor all of that into looking at the other evidence you present right the test court can the tax court however ignored the principle argument that we made which was  record you have that lack said that there was an agreement you know then i pointed out these other things where what they ultimately presented didn't appear to be contemporaneously made they came up with something before trial  then also they conceded that the electorate box wasn't you know when you put all of those together why was a tax court wrong that's a substantiation wasn't enough that's not our contention on appeal aviation what's your best case out there were not a written agreement and there aren't contemporaneous records that just because someone comes and testifies that there's no other conclusion that  reach then that there substantiated that's what you're saying right well known the trier just heard such tell me why i misheard what well if you let me finish the argument i'll tell you the argument the argument is that as a matter of fact dreams for years engstrom and deriving peace paid all the money that that general needed to operate except for the seven million dollars of the revenue that are generated totally independent of those payments so and we have cases where the mr lacker or the engstrom showed that mr lack to use the aircraft thirteen times for private personal flights and it's not engstrom that should be responsible for determining which flights are personal and which are business when you have a situation where the partners can use the seven million dollars other assets n in this case but that's the principle argument that we're making is that all that thanks drone was paying for was for business use and that fifty thousand dollars and other than that they didn't make any contributions for the operating expenses of g m now but g m now again had seven million dollars of cash that it generated from other sources and the  law firm said ok we want to use these planes and we'll pay the balance and the law firms use the planes much like an owner would use the planes and so we look at the powell alto  country case that the tax court never even analyzed and you have exactly the same situation not exactly but you have the same situation where you have several controlled companies one of which owns an airplane and the other say ok between g m now and i mean between driving season angstrom they decided between themselves who was going to pay what and during this four year period gerardi paid seven million dollars and engstrom either pa point seven if you don't allow that to point the two and a half million dollars of that extra paid  for use of any of the partnership assets so no they didn't make payments for their partnership obligations rather they arranged with let's go with thanks drum and sweep that was a concession and i'm not prepared to talk about whether all those expenses that were paid by engstrom that none of the more personal for mr lack but no as far as i know well i shouldn't even go but he did pay tax on the six million dollars of revenue that g m now earned from other sources and he paid tax on fifty percent of the money that was paid by  as well as by him and of the task court's ruling with respect to his two point five million dollars he's still going to pay tax on half of that and it just it there was in the course of history of the partnership and certainly for these four years the general partners never made any contributions to the partnership except the six hundred fifty thousand dollars and our position is that as owners of the partnership they're that doesn't mean we lose it all because the facts are the facts the partners didn't put in any money except the six hundred fifty thousand dollars capital contribution the partnership did borrow some money about a million dollars  pick out number out of the single line of testimony about what reason that what the trigger rates were and we're going to multiply that times fly it out and i should remind the court that the commissioner had the burden of proving whether the expenses were reasonable or not and it's a leap to say ok there was no agreement so we're going to side that anything that wasn't allowed as or standing was that that was an issue here that yes the commissioner does have the burden on on whether the expenses are ordinary and necessary but my understanding is where this case went was on the substantiat clearly erroneous and we're set aside so when you have a right we're actually a minute over your time unless the panel has any other questions that concludes your time i will give you two minutes for rebuttal but wait you're actually a minute over morning good morning your honour's i'm richard calderon on behalf of the commissioner of internal revenue and may it please the court the tax court in this case addressed to angstroms claims to doctors travel expenses both amounts that  these years and there was no evidence of a written or any other kind of agreement between them and jan now under which the firm would agree to pay a share of jenelle's operating expenses what we have in the record as exhibit seven is is at supplemental excerpts of record twenty three as well as pages sixty two sixty three and seventy seven of opponents excerpts of record that it was his unilateral decision to determine how much money he would personally put into  if it's an ordinary and necessary issue that's the commissioner's burden correct that's correct and if it's your substantiation issue that would then be the a palance ye is there did the tax court are there can't tax courts fining based on lack of substantiation or a conclusion that expenses were not ordinary and necessary or both it's both your honor as to the payments that the tax court concluded that these were not business expenses under section one sixty two i do angstrom because they were payments that lack made under his own obligations and they weren't loans to the firm after all of the amounts that  experiments what i can say what was lacking in control he was a fifty percent owner did he have decision making authority over angstrom he said i'm excerpts of record seventy seven that it was one hundred percent his decision how much angstrom page you know has also put forward several arguments in an attempt to show that it didn't have to meet the substantiation requirements of section three seventy four but the regulatory exception for situations in which the business purpose of the aircraft for purposes other than from business and indication if you look at the reconstructed flight log that engstrom introduced through like at trial to support its claim that it substantiated the business purpose of its travel a large number of those flights list only mr gerardi who had no direct connection with things for him as a passenger well now just so that i understand the evidence that were there contemporaneous records or with these d so to the extent that they can substantiate the business purpose of any travel that is only through this after the factory constructed flight log that was brought in for mr like a trial and jim has also argued principally in its reply br year mr locke testified at trial that these were principally his flights and that he had personal knowledge of most of the travel and angstroms counsel indicated to the tax court that this document was being introduced just suggesting that the business purpose travel well i like to think of things i was like to think of the burden of proof because that's obviously some porton in a pallet cases let's say on the substantiation issue if you had lost based on the evidence that was presented would you lose on appeal if that if the tax court had looked at you know there's obviously if there's more than one way to look at evidence on substantiation is it possible that based on what the tax court did that either of you could loose based on the burden of proof in so far as the tax court held that the business purpose of flights was not substantiated your honor no i don't think so there's no evidence at all that any additional flights had a business purpose for engstrom the tax courts look through all of the flights on which mr locke was identified as a passenger that were on the reconstructed flight logs and it very carefully went through the record and determined that a number of those flights had a connection to angstroms business and a number of them did not and as i read and that mr hanks from took exception with that and said well i had an agreement right your honor i don't believe that argued that lack of a business purpose for any of the additional flights it has said the times when we haven't conceded the issue they haven't conceded the issue your honor but that my view of their poetry is that they have said that the tax what shouldn't have granular view it should have instead said well our overall costs are reasonable to understand what i'm saying there are some cases that if if it if there's deference owed to the fact finder and how they look at evidence even though one side or the other they don't agree with that there's some cases when you come on an appeal that the standard of review is going to determine who who when so i think it kind of works the other  wouldn't they they would certainly have a better argument as i mean i you know i don't think it helps your purpose some time to take what everyone like takes the far extreme so i mean a lot of times what we have isn't you know if there were a written agreement they would have a better argument here your honor i agree that they would have a very strong argument under section one sixty two way they would also have a good argument under two seventy four that at least some of their travel was for a business purpose but we have a record in which angstrom has affirmative conceded that some of the expenses for which it was paying to directions involve travel that had nothing to do with things from susan that if they agreed to pay half the operating costs they say and you may use the planes when we don't need them  why wouldn't it why would they have to justify every single flight they just have to justify their that was reasonable for them to pay for half of the operating costs in order to have this damn i could pass it i don't see why you would even get to looking at the  me thank you first of all counsel said that on the hypothetical that if there was an agreement that written agreement that action would pay fifty percent of the costs in order to have use of the airplane that mean that we'd have a better argument he can seriously have better argument you'd still have to identify which flights were the only conceded after a little pounding here that's true which flights were for business and which ne to seventy four that's just not the case if you are paying for business in this under these facts it to a should because the guy i bought it is making decisions about the flights from and the guy that is making the decisions for using the plane is the general partner's the same guy so how can you if they're going to have and if they're going to have a an agreement if they're going to have a situation where engstrom is paying for these flights and lack can use the planes anyway he wants as a general partner then why do we have to substantiate the business expense the business nature of the us now having said that if you accept that somehow there's going to have to be an allocation of the expenses then you have to start with the entire the doctrine because there was no finding that the expenses claimed  by the buy engstrom were reasonable and again the tax court went from four million dollars into directions to nine billion dollars into directions partly by two seventy four but mostly by applying these fixed rates and i don't see in palo alto the passport used fix rates because they made a specific finding that the expenses claimed were an reasonable here there is no