- 66 -
ly operations conducted by B&L Ireland and B&L Hong Kong were
substantial in nature within the meaning of section 1.954-
3(a)(4)(iii), Income Tax Regs.34 Petitioners rely on the opin-
ions of Gary E. Holdren (Mr. Holdren), a certified public accoun-
tant (C.P.A.). His analyses were made from an accounting per-
spective. Respondent relies on the opinions of three employees
(viz., Scott D. Hakala, Ph.D. (Dr. Hakala), who holds a Ph.D. in
economics; Martin D. Hanan, who is a chartered financial analyst
and an accredited senior appraiser; and Ray A. Sheeler, who is a
C.P.A.) of Business Valuation Systems (BVS) who prepared an open-
ing report (BVS report) and a rebuttal report. Although the BVS
report incorporated accounting concepts, it primarily sets forth
economic analyses of the respective assembly operations of B&L
Ireland and B&L Hong Kong.
The respective opinions of Mr. Holdren and the authors of
the BVS report appear to require different conclusions with
respect to the substantiality of the respective assembly opera-
tions conducted by B&L Ireland and B&L Hong Kong. It appears
that at least part of the differences in those opinions is at-
34 Some of the quantitative analyses performed by those experts
related to whether the respective assembly operations of B&L
Ireland and B&L Hong Kong satisfy the mechanical test of sec.
1.954-3(a)(4)(iii), Income Tax Regs. We rely on the facts and
circumstances test of that regulation in holding for petitioners
herein. Consequently, we need not, and do not, consider applica-
tion of the mechanical test of sec. 1.954-3(a)(4)(iii), Income
Tax Regs., to these cases.
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