The Limited, Inc. - Page 21




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          “deposits with persons carrying on the banking business” pursuant           
          to section 956(b)(2)(A).  Petitioner argues that the term "the              
          banking business" has no special meaning and that WFNNB was                 
          organized as a bank, is operated as a bank, is regulated as a               
          bank, and is considered a bank by various experts in banking,               
          finance, and economics.  Petitioner likewise argues that the term           
          “deposits” has no special meaning and the MFE N.V. CDs are                  
          deposits both in form and substance.                                        
          IV.  Discussion                                                             
               A.  Introduction                                                       
               As will be explained below, the provisions of subpart F here           
          in question were enacted to tax as dividends the repatriated                
          earnings of controlled foreign corporations.  An exception was              
          made for deposits with persons carrying on the banking business.            
          Given the limited purpose of WFNNB (to issue credit cards to                
          customers of the stores), we find that the MFE N.V. CDs are not             
          “deposits with persons carrying on the banking business”, as                
          Congress used those words in section 956(b)(2)(A).  We                      
          independently reach the same conclusion based on the                        
          relationships between and among petitioner, WFNNB, MFE, and MFE             
          N.V.  Therefore, we find that the $174,127,665 in question was              
          invested in U.S. property.  The details of our reasoning are as             
          follows.                                                                    








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