Robert A. Stanford and Susan Stanford - Page 19

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          banking, financing, or similar business and therefore that the              
          subpart F income of Guardian Bank may not be reduced by deficits            
          in the earnings and profits of its parent corporation, Stanford             
               In the alternative, petitioners cite Commissioner v.                   
          Bollinger, 485 U.S. 340 (1988), and National Carbide Corp. v.               
          Commissioner, 336 U.S. 422 (1949), and petitioners argue that               
          Guardian Services and Stanford Financial should be treated as               
          mere agents of Guardian Bank and that Guardian Services' and                
          Stanford Financial's 1989 and 1990 deficits in earnings and                 
          profits should simply be treated as expenses or losses of                   
          Guardian Bank.                                                              
               Under Montserrat law, neither Guardian Services nor                    
          Stanford Financial obtained banking licenses and therefore                  
          neither presumedly was permitted to engage directly in banking              
          activity on behalf of Guardian Bank.                                        
               As we have found, in its advertisements, Guardian Services             
          represented that it was an "affiliate" of Guardian Bank, not a              
          nominee or agent thereof.  The employees of Guardian Services               
          provided customers of Guardian Bank with Guardian Services’ own             
          financial statements and not those of Guardian Bank.  The service           
          agreement between Guardian Bank and Guardian Services did not               
          indicate that Guardian Services was a nominee or agent of                   
          Guardian Bank.  The service agreement specified only that                   
          Guardian Services would perform marketing activities for Guardian           

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