Norwest Corporation and Subsidiaries, Successor in Interest to United Banks of Colorado, Inc., and Subsidiaries, et al. - Page 57

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          substance.”  In Estate of Weinert, the Court of Appeals for the             
          Fifth Circuit (the Fifth Circuit) stated:                                   
                    Resort to substance is not a right reserved for                   
               the Commissioner's exclusive benefit, to use or not to                 
               use--depending on the amount of the tax to be realized.                
               The taxpayer too has a right to assert the priority of                 
               substance--at least in a case where his tax reporting                  
               and actions show an honest and consistent respect for                  
               the substance of a transaction.  * * *  [Id. at 755.]                  
          Respondent principally cites Illinois Power Co. v. Commissioner,            
          87 T.C. 1417 (1986), as demonstrating the circumstances in which            
          this Court shall apply what respondent calls the “Weinert rule”             
          (respondent's Weinert rule).  Petitioner argues that respondent's           
          Weinert rule is a “misrepresentation of the holding in Weinert.”            
               We believe that respondent's Weinert rule is an offshoot of            
          the Fifth Circuit's statement in Estate of Weinert.  The Fifth              
          Circuit did not state that a taxpayer can argue the priority of             
          substance only if his tax reporting and other actions show an               
          honest and consistent respect for the substance of a transaction,           
          but rather, that a taxpayer can argue substance over form at                
          least when those conditions are met.  In other words, the Fifth             
          Circuit statement does not make honest and consistent respect for           
          the substance of a transaction in tax reporting and other actions           
          the sine qua non of a taxpayer's right to disavow the form of a             
          transaction.                                                                
               We note, however, that this Court in Illinois Power Co. v.             
          Commissioner, supra, applied respondent's Weinert rule and did              
          not allow a taxpayer to disavow the form of a gift transaction              




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