Napoliello

Michael Napoliello appeals the United States Tax Court’s decision in favor of the Commissioner of Internal Revenue. We have jurisdiction under 26 U.S.C. § 7482 (a), and we affirm.

FACTS

This case arises from the Internal Revenue Service’s (“IRS”) investigation of a tax shelter. The type of shelter is known as a “Son-of-BOSS” (being a variant of the Bond and Options Sales Strategy (“BOSS”) shelter). Son-of-BOSS tax shelters involve a series of transactions connected to offsetting foreign currency options. See generally Desmet v. Comm’r of Internal Revenue, 581 F.3d 297, 299-300 (6th Cir.2009). The shelters’ purpose is “to generate artificial tax losses designed to offset income from other transactions.” Kornman & Assocs., Inc. v. United States, 527 F.3d 443 , 446 n. 2 (5th Cir.2008).

This particular Son-of-BOSS tax shelter worked as follows. On October 25, 2000, Napoliello established and became the sole member of MN Trading LLC (“MN Trading”). On behalf of MN Trading, Napoliello entered into two pairs of long and short foreign currency option contracts. Each long option had a premium of $30 million and each short option had a premium of $29.25 million. On November 15,…