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(2) petitioner, the sole U.S. shareholder of MFE, must include
$174,127,665 in gross income pursuant to section 951(a)(1)(B).
Respondent has numerous arguments why the MFE N.V. CDs are
not deposits with persons carrying on the banking business within
the meaning of section 956(b)(2)(A) (sometimes, section 956
deposits). Principally, respondent argues that (1) to be in the
banking business for purposes of section 956(c)(2)(A), an
institution must first be a “bank” within the meaning of section
581 (definition of bank for purposes of rules of general
application to banking institutions), and (2) since WFNNB does no
more than operate a private label credit card business, its
activities are too narrow to put it into “the banking business”.
Respondent also argues that the MFE N.V. CDs did not constitute
deposits as that term is used in section 956(b)(2)(A).
Alternatively, respondent argues that, because, in
substance, the MFE NV CDs are the repatriation of earnings of a
controlled foreign corporation, they should be treated as such no
matter what steps petitioner took to color them as something
else.
B. Petitioner’s Arguments
Petitioner denies that MFE N.V. was created, organized, or
funded to avoid the application of section 956. Moreover,
petitioner argues that the MFE N.V. CDs do not constitute U.S.
property since they qualify for an exception to that term as
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