The Limited, Inc., and Consolidated Subsidiaries - Page 30

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          export and loans to U.S. sellers or processors of the controlled            
          foreign corporation's property.  We believe that a person                   
          carrying on the banking business, for purposes of section                   
          956(b)(2)(A), must, at the very least, provide banking services             
          useful to a controlled corporation engaging in business                     
          activities in the United States.  Our conclusion that Congress              
          had a group of business-facilitating activities in mind is                  
          bolstered by the tax writing committees’ stated belief that the             
          exceptions to the definition of U.S. property were for “normal              
          commercial transactions without intent to permit the funds to               
          remain in the United States indefinitely”.  Both tax writing                
          committees used the term “bank accounts” to describe the deposits           
          exception.  A dictionary definition of the term "bank account"              
          is:  "an account with a bank created by the deposit of money or             
          its equivalent and subject to withdrawal of money (as by check or           
          passbook)".  Webster's 3d New International Dictionary (1993)               
          (similar in second edition, 1934) 172.  While not dispositive of            
          Congressional intent, the use of the term "bank accounts", as               
          defined in the dictionary for many years, is yet another                    
          indication that the deposit exception was meant to encompass                
          banking functions (e.g., the ability to write checks) that would            
          facilitate the controlled foreign corporation’s business.                   

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Last modified: May 25, 2011