- 2 -
Held: B-J was not a CFC in 1992 because B-US did
not own more than 50 percent of the voting power of B-J
stock or more than 50 percent of the value of B-J
stock.
Constructive Dividend Issue: In 1993, B-US
transferred to Framatome Connectors International
(FCI), its French parent, assets worth more than the
assets that B-US received from FCI. The parties
dispute whether these transfers were constructive
dividends paid by B-US in 1993 which are subject to
withholding tax under sec. 1442, I.R.C.
Held: Transfers by B-US to FCI of assets worth more
than the assets B-US received from FCI were constructive
dividends which were actually distributed for purposes of
the U.S.-France Tax Treaty, Convention With Respect to Taxes
on Income and Property, July 28, 1967, U.S.-Fr., 19 U.S.T.
5281, and thus, were subject to withholding tax under sec.
1442, I.R.C.
Mark A. Oates, Marc M. Levey, Erika Schaefer Schechter, A.
Duane Webber, William S. Garofalo, Kathryn D. Weston-Overbey, and
Thomas J. Kinzler, for petitioners.
Theodore J. Kletnick, Jill A. Frisch, Elizabeth Flores,
Steven D. Tillem, Murali Balachandran, and Robert T. Bennett, for
respondent.
TABLE OF CONTENTS
FINDINGS OF FACT ..................... . 5
A. Petitioners, Their Predecessors, Furukawa, and
Sumitomo ................... . . 5
1. The Framatome Companies .......... . 5
2. Burndy-US ................. . 5
3. Furukawa and Sumitomo ........... . 7
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