- 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.
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