Epco, Inc. and Subsidiaries - Page 6

                                                  - 6 -                                                    
            correct.  While petitioner may not have been given cash directly                               
            from the escrow account, petitioner received the benefit of the                                
            funds disbursed in the same manner as if the funds had been                                    
            deposited directly into its own account.  To argue otherwise                                   
            would be an exercise in semantics, and it is well established                                  
            that the substance of the transaction, rather than its form, must                              
            govern the tax consequences.  Garcia v. Commissioner, 80 T.C. 491                              
            (1983) (citing Commissioner v. Court Holding Co., 324 U.S. 331                                 
            (1945); Gregory v. Helvering, 293 U.S. 465 (1935); Biggs v.                                    
            Commissioner, 69 T.C. 905 (1978), affd. 632 F.2d 1171 (5th Cir.                                
                  Petitioner contends that "an escrow not under the control of                             
            the taxpayer is neither a vehicle for the realization of income                                
            nor the receipt of the escrow proceeds themselves."  In support                                
            thereof, petitioner cites the following cases: Swaim v. United                                 
            States, 651 F.2d 1066 (5th Cir. 1981); Sprague v. United States,                               
            627 F.2d 1044 (10th Cir. 1980); Biggs v. Commissioner, supra;                                  
            Carlton v. United States, 385 F.2d 238 (5th Cir. 1967); Garcia v.                              
            Commissioner, supra; Barker v. Commissioner, 74 T.C. 555 (1980);                               
            Brauer v. Commissioner, 74 T.C. 1134 (1980); Fredericks v.                                     
            Commissioner, T.C. Memo. 1994-27; Grannemann v. United States,                                 
            649 F.Supp. 949 (E.D. Mo. 1986).                                                               
                  Most of the cases cited by petitioner have a common thread;                              
            namely, a discussion of or reference to the doctrine of                                        
            constructive receipt.  The doctrine generally provides that a                                  

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011