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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
Financial.
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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