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principles of the listed rulings. The listed rulings were
entirely administrative in origin, and their treatment of
debt/equity ratios as dispositive on conduit status was otherwise
without foundation in tax law. See Northern Ind. Pub. Serv. Co.
v. Commissioner, 105 T.C. 341, 350-351 (1995), affd. 115 F.3d 506
(7th Cir. 1997). As petitioner points out, at the same time the
Commissioner was issuing the listed rulings (from 1969 through
1973), he obtained an important litigation victory supporting the
application of substance-over-form or conduit theories to
disregard transactions involving a corporation functioning as a
conduit for interest payments to obtain treaty exemptions. See
Aiken Industries, Inc. v. Commissioner, 56 T.C. 925 (1971).
Although Aiken Industries addressed essentially the same issue as
the listed rulings, the case is not mentioned in the rulings
issued after it was decided. The rulings after Aiken Industries
instead reaffirmed the primacy of the debt/equity ratio
established in the listed rulings issued before the decision in
that case. Clearly the Commissioner considered the principles of
the listed rulings as distinct from the substance-over-form
principles applied in Aiken Industries. In DEFRA section
127(g)(3)(B), Congress adopted the former and not the latter in
defining the scope of the intended relief.
Respondent also argues, however, that the substance-over-
form principles he seeks to apply to Finance’s capitalization can
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