please accord on behalf of mr mrs mrs baxter we like to make three points above all others one what troubles now most is being punished in two thousand based upon cases concepts that arose in two thousand and six and two thousand and nine that contradict the three controlling supreme court cases that profit reasonable possibility of profit can be calculated without revenue you'll find no case in two thousand segregates the cost of the data from the revenue of the de t to its credit the government concedes that point at page thirty six of it's very when one considers the whole undertaking the nature of the entire transaction and walks through exhibit or j which explains this concept this proposal to buffy baxter and she explained it to her husband who's beyond what is the object here does this make financial sense we know it leads to an annual project at revenue net profit of nine point three percent and that satisfy both prongs of this co all the instances that is thirty years thirty years thirty years this for jay or mrs baxter perspective the power point that explains it to her abundantly clear every point of understanding thirty thirty thirty or thirty years there's an that banks have the ability to walk away but they rarely walk why part of the recession if the debtors servicing the debt as promised structure debt they set aside eighty five percent of the debt balance in income earning deposits and those are adjusted on an annual right and so yes they're just it on an annual right but they're not they're not they're not when which is when you're dealing with this sort of situation of someone's reliance upon long time trusted advisors there's a three prong test that three prong tests number was applied to any one of the three individuals along town trusted the kurdish family and genuinely rely on these people for many years for many different things and so one of our challenges on the penalty aspect is that that test was never a plod if it had been applied under this tax correct and there is an error clearly erroneous here that i think this whole reasonable calls concept and then that you in response to your question judge i think it triggers that point you may recall that the that the tax court of opinion said you can't rely upon your long term trusted advisers lose three individuals local it visors because they did nothing more than just look at brennan what would opinion they testified completely different from that which is they look nothing more and there was no independent analysis you may also recall in the opinion where the court sixty six pete the contemporaneous notes were they gave completely independent advice that was not cover rob around and would saying look the same don't work the way that you've been told we're looking at that's where separately researching this in this this is our conclusion that that shows that they were providing independent advice and that the court was mistaken or said they were doing nothing more than looking at this opinion is saying it's  told there's this big new york law firm this lock this up had no problem relationship what's the best thing i can do but then i don't know about their devotion to me i'm going to get people who are absolutely voted me to look over even if you look at if you compared the transaction to any other transaction you would not have had the drag on investment extremely significant fuel would have it they had to be investment options that would have been more profitable given the drag created by the that's that is the heart of the challenge certainly the current difficulties with those these is they could have gotten  lower they would have but they're looking at the fee on in the instance of c s c a thirty five million euro loam unit eight percent eight percent the fees should have been a little bit going to assume that it's only fifteen percent of that i'm out in i don't need to talk about that fifteen percent a minute but there is a stipulation stipulation fifty one point that they're completely fawley recourse liability for the fourth and in the same way up in rick baxter are liable for the two point nine what has the biggest missed point in the entire case is a structured transaction being presented as a zero coupon maney interest free in the white house handle is eighty five percent of the proceeds are set up an income earning capacity that covers all the  costs so you get interest free use of money for thirty years the exponential growth of that is what generates the two most important percentages and the in the case the seven point nine percent her right for full payment of the interest and all of these three heavy though they may be and all the principle seven point nine percent return make a profit or nine point three percent profit substance most of the findings you're subject to clear error and really there's been no showing very little showing any actual clear error in any factual findings only been t credibility findings is relevant to the overall undertaking here when you're looking at all of what the courts analysis was really finding that they aren't grants grounded on credibility calls just didn't leave these people actually believed was going to be a thirty year transaction and the first is that not that time deposit was sent wrong one year that's a five forty eight paragraph one sixty seven and a fourteen or nineteen nineteen so that's at eighty five percent  they're talking about ask me the first thing any money that's being paid is going to be paid out of and it's only set from one year the second thing is that a letter of credit from you see that was used to get these funds it was necessary to substitute and so that was in more than one hundred every year you could be could reset the interest or pull the loan which is what they did after one year here as happened in all the other cars cases including ones that had nothing to do with nine eleven which is one of their great points as of this was because of nine eleven and that's him e j a five fifty three paragraph once a new one and j a thirteen thirty seven and then here's the real kicker lani baxter entered into a four contract there carter her one year after entering into this loan this thing that she sa looking at the cost here and looking at how expensive this was i say that their wrists really no reasonable expectation of profit here and she really one big point here the one little point that's really being made here is to claim hey you should look at the investments and alone together but they're not integrated you know they're not as as as my opponent sent his up an argument in terms of pendant steps regardless of what the investment and interesting to me that the sale generated almost the exact amount of the combined he said only interesting was intentional that was planned and that was one of the things that the tax court relied on so if you really were trying to maximize your long term investment why would you say how much money can i get from you instead the amounts were literally calculated based on the amount of capital gains you wanted to shelter and she also said like if you were really independently reviewed the transaction and reached a conclusion about it without regard to the brown and world opinion letter and that the finding to the contrary was clear  rogers j twenty six twenty three to twenty four i read several cases i find it was a well reasoned opinion twenty six forty one forty two and pfizer as well reasoned just go along he basically said you know i'm going to nothing to do with what you punch you thousand tax returns it's a question of partnership accounting dealing with the basis for different partner shares and actually has nothing to do you with the lani baxter individual current shelter because this goes it went so only to the question of whether the taxes owed through the current is partnership were going to be eliminated or deferred i'm not necessarily certain that this vice is cracked apart partnership bases issues or are messy but what we really have here is this question did they do an independent analysis of whether it was appropriate all of those answers really rely on some very deep credibility because we've gone through the objective test as you sent that that you know she looked at the now she looked at the the analysis that was done by michael b and said you know compared to conventional loans of a similarly highly highly collateralized low this was a very expensive loan it reduced the tax payers combined wealth by two point one nine million they can get have gotten two point two five million dollars to invest in the same investments from some where else and this investment are completely separate and that point makes clear why you didn't need to do the investments to do the current transaction plenty harshman's actions went through without investment going on and on number two you don't need to do the investments to claim the loss on the tax return and that the investments had not occurred in two thousand which is when they claim they had a lot when number three completely separate that they're trying to use to say hey this means that we expect a profit and that we subjectively intended for this to be a profit and city and the court just didn't believe them she says you know thirty two twenty two sixty five to sixty six twenty three eighteen and nineteen the tax payers many were should have known this would not last three years we've already gone through all those terms always a one year term especially is actually especially the four contract that she would never transaction through you didn't try to go with anybody who's going to give you a better rate or more money for investment without these tax losses these very ta again those are fully supported j twenty sixty eight to sixty nine and twenty ten tell and twenty one eighty four to eighty five twenty to sixty sixty sixty seven i just go through there's there's just so much support for what the court found here and none of this is undermined y he is well qualified she is is he was using a sort of standard kind of financial fee and less than one percent that's jane a twenty to twenty nine to thirty and ultimately there are a lot of discretion here what the court did is she she she had extensive work here she heard argument she made sophistication here we have people who had a lot of experience with investments a lot of experience with loans unlike in c interior had a funeral home director who was understood really just put his money back and then do any sort of pay back thirty five million dollars between you and says oh no that's not going out at that time because she knew how loans were and she knew that the money was going to first come from that time deposit so they knew this was too good to be true clear his part that brown and what opinion is part of this prepackaged tax shelter tax shelter we've been hunting for and so i need you to do a fresh complete in the pendant like which he didn't but the second thing is that you really weren't that motivated by taxes and i find that you were and she pointed to and we would give you all the sites to to what she's referencing where they said well i was motivated by the taxes or i don't know if i went on the spot for the taxes or i was glad it was only being deferred and she says i think you were highly motivated by the taxes and i think that she she likes him said you knew this was too good to be true you knew that you were never going to have to pay out these millions of dollars of two thousand including american electric power nicole rose james rice's toyota were all basic that say you look at the transaction that generated the loss you don't look at other transactions and here there's really no basis to say that these separate investments were integrated they were part of the whole entertaining the whole undertaking was the cards transaction that's the only thing that led to the loss and i said there's three reasons why they're separate and that anybody especially some astute financially sophisticated as lying baxter jaipur can look at and say i don't need to do the investments jesus cards transaction there's nothing in the agreements and i have to do an baxter so this isn't a case where she said ok for levon tarka i only had to find attractive so i'm not going to assess subjective for curtis so because the court made findings on eleventh circuit they're dealing with a partnership motives and those sorts of things reasonable calls are judged at the partnership level here we're dealing with lani baxter who graduated from high school by way of correspondence no college who had the reason mccall's aspects and in terms of reliance for profit motive in what they were told if you look the second point i would make again i'd invite your attention to exhibit a as to what they were tol rule and cooper versus smith and nephew which basically says that the party has to make a showing has a burden of proper honors of satisfying the reliability elements  upon which this gentleman are allowed to exclude revenue from determining profit a mathematically impossible exercise to calculate profit without revenue that was severely criticized in the one tre they offers interest free no otherness all this discussion about when they could have gone out and done the same thing elsewhere no one but no one knows the other bikes or we're talking about a lot of credit we're offering them interest free deal for any period of time much less  appeared they insist about it being restructure they're not going to do this unless they can invest it through their investment managers that serves no tax purposes solely for investment reasons i restructured into a capital leverage program or second repa nine point three percent return their advisers are helping through the tax and non tax structure all along the renegotiating the contract they're coming to different tax they have done this is completely different from the gentleman augusta shaw who had no local about never talk to anybody from the from the law firm who prepared his own returns had his own tax