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Dehydrating & Milling Co., 417 U.S. 134, 148-149 (1974); Gregory
v. Helvering, supra at 467-470; Norwest Corp. v. Commissioner,
111 T.C. 105, 145 (1998); Estate of Durkin v. Commissioner, 99
T.C. 561, 571 (1992).
It is well settled that the Commissioner may both look
behind the form of a transaction to its substance, see Gregory v.
Helvering, supra at 467-470, and bind a taxpayer to the form in
which the taxpayer has cast a transaction, see Commissioner v.
National Alfalfa Dehydrating & Milling Co., supra at 149. See
also Estate of Durkin v. Commissioner, supra at 571. As stated
by the Court of Appeals for the Second Circuit, to which appeal
in these cases would normally lie,
The Commissioner is justified in determining the tax
effect of transactions on the basis in which taxpayers
have molded them, although he may not always be
required to do so. It would be quite intolerable to
pyramid the existing complexities of tax law by a rule
that the tax shall be that resulting from the form of
transaction taxpayers have chosen or from any other
form they might have chosen, whichever is less.
[Television Indus., Inc. v. Commissioner, 284 F.2d 322,
325 (2d Cir. 1960), affg. 32 T.C. 1297 (1959);
citations omitted.]
A taxpayer, in contrast, “may have less freedom than the
Commissioner to ignore the transactional form that he has
adopted.” Bolger v. Commissioner, 59 T.C. 760, 767 n.4 (1973);
see also Norwest Corp. v. Commissioner, supra at 145; Estate of
Durkin v. Commissioner, supra at 571; Coleman v. Commissioner, 87
T.C. 178, 201-202 (1986), affd. without published opinion 833
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