- 22 -
Accordingly, we hold that petitioner has not carried its
burden of showing that the substance of the transaction was
different from its form. Elrod v. Commissioner, 87 T.C. 1046,
1066 (1986); Pritchett v. Commissioner, 63 T.C. 149, 171 (1974)
(citing Ullman v. Commissioner, 264 F.2d 305 (2d Cir. 1959),
affg. 29 T.C. 129 (1957)); Estate of Durkin v. Commissioner, T.C.
Memo. 1992-325, supplemented by 99 T.C. 561, 572 (1992); see also
Estate of Corbett v. Commissioner, T.C. Memo. 1996-255.
Consistent with our holding, the Court of Appeals for the
Ninth Circuit (the circuit in which this case would be
appealable) has held, in certain instances, that taxpayers may
not cast a transaction in one form, file returns consistent with
that form, and then argue for an alternative tax treatment after
their returns are audited. See Investors Ins. Agency, Inc. v.
Commissioner, 677 F.2d 1328, 1330 (9th Cir. 1982), affg. 72 T.C.
1027 (1979); McManus v. Commissioner, 583 F.2d 443, 447 (9th Cir.
1978) ("A taxpayer is estopped from later denying the status he
claimed on his tax returns."), affg. 65 T.C. 197 (1975);
Parkside, Inc. v. Commissioner, 571 F.2d 1092 (9th Cir. 1977),
revg. T.C. Memo. 1975-14; In re Steen, 509 F.2d 1398, 1402-1403
n.4 (9th Cir. 1975); Demirjian v. Commissioner, 457 F.2d 1, 5
n.19 (3d Cir. 1972), affg. 54 T.C. 1691 (1970).
In its tax and financial reporting and other actions,
petitioner has not demonstrated an honest and consistent respect
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