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We need not decide whether the proposition for which peti-
tioner cites the U.S. Court of Appeals for the Second Circuit in
Newman is a correct interpretation by that court of applicable
Federal tax law.84 This is because, even assuming arguendo that
that court's interpretation were correct, petitioner has not
established that any of the persons involved in any of the Bank
transactions had a nontax, business purpose for the form in which
those transactions were cast.
(a) Bangkok Bank LA Branch
and Union Bank
Petitioner contends that the U.S. banks in question pre-
ferred the form in which the transactions involving them were
cast because (1) their participation afforded them an opportunity
to earn a profit and (2) they preferred cash deposits as col-
lateral for loans over tangible property located outside the
United States since it would have been difficult for them to
protect their security interest in and foreclose against such
property.
With respect to petitioner's first contention (viz., the
U.S. banks in question participated in the transactions involving
them because they afforded them an opportunity to make a profit),
petitioner adduced no proof that the rates of interest payable on
84 We note that the instant cases are appealable, absent a
stipulation by the parties to the contrary, to the U.S. Court of
Appeals for the District of Columbia Circuit, and not to the
Court of Appeals for the Second Circuit that decided Newman v.
Commissioner, 902 F.2d 159 (2d Cir. 1990), vacating and remanding
T.C. Memo. 1988-547. Sec. 7482(b).
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