DHL Corporation and Subsidiaries - Page 170

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          trademark fall short of the strictest quality control standards             
          requisite for a textbook-quality license agreement that may be              
          required as between unrelated third parties, they are sufficient            
          and enforceable in the circumstances here.                                  
               Petitioners make a collateral attack on the ownership issue.           
          They seek refuge in section 482 regulations in an attempt to show           
          that the form they chose should not be respected.  Petitioners’             
          argument focuses on the 1968 regulations11 and points out that              
          they do not contain mention of a license as a factor relevant to            
          which person or entity should be considered to have “developer”             
          status of intangible property.  See sec. 1.482-2(d)(1)(ii),                 
          Income Tax Regs.  In essence, petitioners argue that legal                  
          ownership should be disregarded for purposes of any section 482             
          reallocation of intangibles.                                                
               Respondent argues that the facts here support a finding that           
          DHL is the developer or that the regulations in question provide            
          that, in the absence of a bona fide cost-sharing arrangement,               
          respondent may make allocations upon the transfer of intangible             
          property by the developer to a related entity.  Respondent                  


               11  The parties refer to the regulations that were                     
          promulgated in 1968 because the newer sec. 482 intangible                   
          property regulations were adopted in 1994, and petitioners did              
          not elect, pursuant to sec. 1.482-1(j), Income Tax Regs. (1994),            
          to have them apply retroactively.                                           
               Sec. 1.482-2(d), Income Tax Regs., was effectively                     
          superseded by sec. 1.482-4T, Temporary Income Tax Regs., 58 Fed.            
          Reg. 5263, 5287 (Jan. 21, 1993), generally effective for taxable            
          years beginning after Apr. 21, 1993.  The tax years in issue are            
          1990, 1991, and 1992.                                                       



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