- 187 -
that the U.S. certificates of deposit and bank deposits are
"deposits" within the meaning of section 861(c).
As we have stated, supra pp. 168-169, neither the Internal
Revenue Code nor the relevant regulation defines the term
"carrying on the banking business" for purposes of section
861(c)(1). Rev. Rul. 83-176, 1983-2 C.B. 111, however,
interprets section 861(c). We agree with the reasoning of Rev.
Rul. 83-176, and we apply that reasoning in our interpretation of
the phrase "persons carrying on the banking business" in section
861(c)(1).27
The parties did not brief the issue of whether the U.S.
banks from which LTD purchased pooled investments were "persons
carrying on the banking business" for purposes of section
861(c)(1). Based upon the entire record before us, however, we
are convinced that the banks were "persons carrying on the
banking business" within the meaning of section 861(c)(1). LTD
placed its clients’ funds in U.S. banks that were insured by the
FDIC and FSLIC. Accordingly, we conclude that all of the banks
with which LTD dealt meet the requirements that (1) a substantial
part of the person’s business consist of "receiving deposits and
26(...continued)
(5th Cir. 1971).]
Accordingly, a ruling or other interpretation by the Commissioner
is only as persuasive as the reasoning and precedents contained
in such interpretation. Halliburton Co. v. Commissioner, 100
T.C. 216, 232 (1993), and the cases cited therein, affd. without
published opinion 25 F.3d 1043 (5th Cir. 1994).
27
See supra note 26.
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