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Petitioner argues that his position is further supported by
section 301.6109-1(a)(2), Proced. & Admin. Regs., which provides
that a grantor trust is not required to obtain a separate tax
identification number, and by section 1.671-4(b), Income Tax
Regs., which provides that a grantor trust is not required to
file a separate tax return.
We begin our analysis with the observation that section
1361(c)(2), which provides that a grantor trust may be a
shareholder of an S corporation and that the deemed owner of such
grantor trust will be treated as the shareholder of the S
corporation, expressly states that the provision applies for
purposes of section 1361(b), which is part of subtitle A.
Significantly, section 1361 makes no reference to its
applicability to section 6241, which is part of subtitle F, or
the regulations thereunder, nor is there any cross-reference in
subtitle F to section 1361. Equally important, the two
provisions are designed to serve two wholly independent purposes.
On the one hand, section 1361(c) is a substantive provision of
law--its primary purpose is to define the types of trusts that
are permitted to be shareholders of an S corporation. In
contrast, section 301.6241-1T(c)(2), Temporary Proced. & Admin.
Regs., is a procedural provision that defines the circumstances
6(...continued)
Subpart E of part I of subchapter J contains the so-called
grantor trust provisions.
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