- 47 -
authorities"12 that have construed the meaning of the terms
"voting stock" and/or "voting power" for purposes of section
1504(a) and its predecessor provisions in the Internal Revenue
laws support their position under section 1504(a)(1). According
to petitioners, those cases and rulings
consistently have defined "voting stock" as stock that
has the right to vote in the election of directors and
have measured a stock's "voting power" by reference to
the voting power of the directors such stock elects.
They have specifically not taken into account voting
rights with respect to matters other than the right to
vote in the election of directors, no matter how exten-
sive such rights may be, and have never measured voting
power other than by reference to the voting power of
directors. * * *
(We shall refer to the test that petitioners contend all perti-
nent case law and rulings require us to apply in resolving the
question presented under section 1504(a)(1) as the mechanical
test.)
According to petitioners, application of their mechanical
test mandates the following conclusions:
12 The so-called "administrative authorities" on which petition-
ers, as well as respondent, rely include various rulings, both
published and private, that the IRS has issued. (We shall refer
collectively to those rulings as rulings.) Revenue rulings are
not regarded as precedent in this Court. They merely represent
the position of the Commissioner of Internal Revenue (Commis-
sioner) on a particular issue. Lucky Stores, Inc. and Subs. v.
Commissioner, 105 T.C. 420, 433 (1995). However, the public
generally has the right to rely on positions taken by the Commis-
sioner in revenue rulings. Nissho Iwai Am. Corp. v. Commis-
sioner, 89 T.C. 765, 778 (1987). Private letter rulings are not
regarded as precedent in this Court, and the public may not rely
on them. See sec. 6110(j)(3); Shelton v. Commissioner, 105 T.C.
114, 119 (1995).
Page: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 NextLast modified: May 25, 2011