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percentage ownership of stock having 50 percent or less of the
voting power.
Petitioners contend that those cases support their position
that Burndy had more than 50 percent of the voting power and
value of stock of Burndy-Japan. We disagree. The Government
prevailed in those cases by relying on section 1.957-1(b)(2),
Income Tax Regs., and by invoking the doctrine of substance over
form. That doctrine generally allows the Commissioner to
recharacterize a transaction according to its substance but does
not allow a taxpayer to disavow a transactional form of the
taxpayer’s own choosing. See Commissioner v. Natl. Alfalfa
Dehydrating & Milling Co., 417 U.S. 134, 149 (1974); Commissioner
v. Court Holding Co., 324 U.S. 331, 334 (1945); Gray v. Powell,
314 U.S. 402, 414 (1941); Higgins v. Smith, 308 U.S. 473, 477
(1940); Gregory v. Helvering, 293 U.S. 465 (1935); Nestle
Holdings, Inc. v. Commissioner, 152 F.3d 83, 87 (2d Cir. 1998),
affg. in part and revg. in part on other issues and remanding
T.C. Memo. 1995-441. Generally, the Commissioner, not the
taxpayer, can assert the doctrine of substance over form. See
Higgins v. Smith, supra; Founders Gen. Corp. v. Hoey, 300 U.S.
268, 275 (1937); Gregory v. Helvering, supra at 469; Old Mission
Portland Cement Co. v. Helvering, 293 U.S. 289, 293 (1934);
Television Indus., Inc. v. Commissioner, 284 F.2d 322, 325 (2d
Cir. 1960), affg. 32 T.C. 1297 (1959); Interlochen Co. v.
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