Lee Mizell and Pearlene Mizell - Page 8

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            necessarily arising from strict contractual relationships.                                
            Consistent with its dictionary definition, in most of the                                 
            instances where it is used in the Internal Revenue Code, the word                         
            "arrangement" refers to some general relationship or overall                              
            understanding between or among parties in connection with a                               
            specific activity or situation.  Generally, it is not limited                             
            only to contractual relationships, or used in a way that suggests                         
            that its terms and conditions must be included in a single                                
            agreement, contractual or otherwise.  Congress obviously                                  
            recognized a distinction between a contract and the broader                               
            concept of an "arrangement", as is evident from those sections of                         
            the Internal Revenue Code that make reference to both.3  In those                         
            sections where only a contractual relationship is contemplated,                           
            "arrangement" is modified by the word "contractual".4                                     

            3  See, e.g., sec. 401(a)(30) (dealing with employee benefit                              
            plans), which includes the following language:  "all other plans,                         
            contracts, or arrangements"; sec. 4003(d) (dealing with excise                            
            taxes on vehicles, parts and accessories), which includes the                             
            following language:  "In the case of a contract, sale, or                                 
            arrangement"; sec. 4975(d)(2) (dealing with excise taxes on                               
            prohibited transactions), which includes the following language:                          
            "any contract, or reasonable arrangement"; and sec. 7701(e)(3)                            
            (a definitional section), which includes the following language:                          
            "Special rules for contracts or arrangements involving solid                              
            waste disposal, energy, and clean water facilities."                                      
            4  See, e.g., sec. 465(c)(6)(B) (pertaining to the rules                                  
            applicable with respect to accounting periods), which includes                            
            the following language:  "The term 'equipment leasing' does not                           
            include the leasing of master sound recordings, and other similar                         
            contractual arrangements"; and sec. 4216(b)(5)(B) (dealing with                           
            excise taxes on containers), which includes the following                                 
            language:  "the lowest price shall be determined * * * without                            

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