- 102 -
form and related principles. See Commissioner v. Court Holding
Co., supra; Reef Corp. v. Commissioner, 368 F.2d 125, 129-130
(5th Cir. 1966), affg. in part, revg. in part on another issue
T.C. Memo. 1965-72. If a person involved in a transaction func-
tions as a conduit or intermediary between the other persons in-
volved in that transaction, that is to say, where the actual ob-
ligation, whether legal or otherwise, runs between those other
persons, such person will be treated as such for Federal tax pur-
poses. See Esmark, Inc. & Affiliated Cos. v. Commissioner, 90
T.C. 171, 194 (1988), affd. without published opinion 886 F.2d
1318 (7th Cir. 1989); see also Aiken Indus., Inc. v. Commis-
sioner, 56 T.C. 925, 934 (1971). Even if a person involved in a
transaction is otherwise engaged in business and is not con-
trolled by any of the other persons involved in that transaction,
the role of that person in the transaction may nonetheless be
ignored or recharacterized. See Koehring Co. v. United States,
583 F.2d 313, 320 (7th Cir. 1978); Burns v. Commissioner, 78 T.C.
185, 212-213 (1982); Estate of Weiskopf v. Commissioner, 64 T.C.
78, 93-98 (1975), affd. without published opinion 538 F.2d 317
(2d Cir. 1976); Bank of Am. Natl. Trust & Sav. Association v.
Commissioner, 15 T.C. 544, 552-553 (1950), affd. per curiam 193
F.2d 178 (9th Cir. 1951).
A very important consideration in applying substance over
form and related principles relates to the presence or the ab-
sence of a nontax, business purpose for the form of a transac-
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