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subject to a single level of tax, assuming the shareholders
include the patronage distributions in income. Gold Kist Inc. v.
Commissioner, supra at 714. Petitioner purchased products from
vendors and Western and resold them to member and nonmember
stores for a profit. Ordinarily, petitioner would distribute the
patronage income to the shareholders who own member stores and
retain the nonpatronage income.
Petitioner asserts that the cash it provided to the vendors
at the annual food show from check transactions and promotional
accounts should not be included in its income because it held
these funds as a nontaxable intermediary. Respondent argues that
this cash was income to petitioner, and that the food show cash
payments to members were merely part of a scheme to bypass the
patronage dividend rules by way of the vendors. To resolve this
issue, we must examine the facts and circumstances of the case.
Angelus Funeral Home v. Commissioner, 47 T.C. at 395; Seven-Up
Co. v. Commissioner, supra at 977;
The economic substance of a transaction, rather than the
form in which it is cast, is controlling for Federal income tax
purposes; thus, courts may pierce the form of a transaction and
tax the substance. Griffiths v. Helvering, 308 U.S. 355, 356-357
(1939); Gregory v. Helvering, 293 U.S. 465, 469 (1935). The
underlying philosophy of the "substance over form" doctrine is to
prevent taxpayers from attempting to subvert the taxing statutes
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