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The fact that the parties submitted this case to the Court fully
stipulated does not change or otherwise lessen petitioner's
burden in this case. Rule 122(b); Kitch v. Commissioner, 104
T.C. 1, 8 (1995), affd. 103 F.3d 104 (10th Cir. 1996).
We focus on the text of TRA section 204(a)(7)(C); i.e., the
leased building described in section 204(a)(7) is “to serve as
world headquarters of the lessee and its affiliates.” TRA sec.
204(a)(7)(C). In accordance with this text, a corporate taxpayer
such as petitioner must establish that: (1) It has affiliates
and (2) the leased building serves as its world headquarters and
the world headquarters of its affiliates. Petitioner has not
established either of these requirements.
As to the first requirement, petitioner argues that its
members were its affiliates. We disagree. For purposes of this
case, we find illuminating United States v. Kjellstrom, 100 F.3d
482 (7th Cir. 1996), affg. 916 F. Supp. 902 (W.D. Wis. 1996), a
case decided by the court to which this case is appealable. In
Kjellstrom, a husband and wife and their four sons were the
shareholders of an S corporation named Wisco Industries, Inc.
(Wisco). The husband was Wisco’s chief executive officer, and
the four sons worked for Wisco in various officer or other
capacities. Wisco manufactured and sold metal stamping, and it
had its office and a separate assembly plant in Wisconsin and
another facility in Alabama.
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