Turner Broadcasting System, Inc. and Subsidiaries - Page 20

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               Even if alternative explanations are available to account              
          for the results of a transaction, this Court will not disregard             
          the form of the transaction if it accounts for the transaction at           
          least as well as alternative recharacterizations.14  This is                
          particularly true in cases that deal with public companies.  As             
          we stated in Esmark, Inc. & Affiliated Cos. v. Commissioner,                
          supra at 183: "Congress enacted a statute under which tax                   
          consequences are dictated by form; to avoid those consequences,             
          respondent must demonstrate that the form chosen by petitioner              
          was a fiction that failed to reflect the substance of the                   
          transaction."  (Emphasis added.)                                            
               In all the cases cited to us where this Court adopted a                
          substance-over-form argument, a desire to gain a tax benefit,               
          through the use of meaningless steps or some other tax fiction,15           
          was present.  Respondent can point to no such tax fiction or                

               14See Grove v. Commissioner, 490 F.2d 241 (2d Cir. 1973),              
          affg. T.C. Memo. 1972-98; Carrington v. Commissioner, 476 F.2d              
          704, 709 (5th Cir. 1973), affg. T.C. Memo. 1971-222.                        
               15For an example of a transaction that was considered to be            
          a tax fiction by the Supreme Court, see Knetsch v. United States            
          364 U.S. 361 (1960).  That case is authority for the proposition            
          that                                                                        

               the Commissioner * * * [may] disregard transactions                    
               which are designed to manipulate the Tax Code so as to                 
               create artificial tax deductions [benefits].  They do                  
               not allow the Commissioner to disregard economic                       
               transactions, * * * which result in actual, non tax-                   
               related changes in economic position.  [Northern Ind.                  
               Pub. Serv. Co. & Subs. v. Commissioner, 115 F.3d 506,                  
               512 (7th Cir. 1997), affg. 105 T.C. 341 (1995).]                       




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