Northern Indiana Public Service Company - Page 29

                                               - 29 -                                                 
                  Based on the facts and circumstances before us, we hold that                        
            Finance did not act as a conduit or agent with respect to the                             
            transactions in issue.  It follows that petitioner was not                                
            required to withhold tax on interest payments to the Euronote                             
            holders.14                                                                                


                                                            Decision will be entered                  
                                                      for petitioner.                                 








            13(...continued)                                                                          
            of whether it was adequately capitalized.  However, Rev. Rul. 84-                         
            153, supra, was modified by Rev. Rul. 85-163, 1985-2 C.B. 349, as                         
            follows:                                                                                  

                        Pursuant to the authority contained in section                                
                  7805(b) of the Internal Revenue Code, the holdings of                               
                  * * * Rev. Rul. 84-153 will not be applied to interest                              
                  payments made in connection with debt obligations                                   
                  issued prior to October 15, 1984, the date that * * *                               
                  Rev. Rul. 84-153 [was] published * * *                                              

            Finance issued its Euronotes on Oct. 15, 1981, approximately 3                            
            years prior to the effective date of Rev. Rul. 84-153, as                                 
            modified by Rev. Rul. 85-163.                                                             

            14As a result of our conclusion, we need not address                                      
            petitioner's alternative argument that Finance met the capital                            
            requirements of DEFRA sec. 127(g)(3) by virtue of the assignment                          
            of petitioner's accounts receivable.                                                      




Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  

Last modified: May 25, 2011