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petitioner argues that the MFE N.V. CDs do not constitute U.S.
property since they qualify for an exception to that term as
“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
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