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Petitioners contend that respondent’s reliance on Alumax
here is inconsistent with Tech. Adv. Mem. 97-14-002 (Apr. 4,
1997) (the TAM). Petitioners contend that the TAM precludes
respondent from relying on a case (such as Alumax) which
interprets the 80-percent test in section 1504 to interpret the
50-percent test in section 957(a).14 We disagree. The TAM
states that a taxpayer may not rely on cases interpreting section
957 to interpret section 1504 because the cases interpreting
section 957 (which the taxpayer cited) allowed the Commissioner,
not the taxpayer, to apply the substance over form doctrine to
prevent taxpayer abuse. It is well established that the
Commissioner may rely on the substance over form doctrine to a
greater extent than taxpayers. See Norwest Corp. v.
Commissioner, 111 T.C. at 140-147; Estate of Durkin v.
Commissioner, 99 T.C. at 572; see also Higgins v. Smith, 308 U.S.
at 477; Founders Gen. Corp. v. Hoey, 300 U.S. at 275; Gregory v.
Helvering, 293 U.S. at 469; Old Mission Portland Cement Co. v.
Helvering, 293 U.S. at 293; Television Indus., Inc. v.
Commissioner, 284 F.2d at 325; Interlochen Co. v. Commissioner,
232 F.2d at 877. Here, respondent, not petitioners, is citing a
case interpreting section 1504. Thus, respondent’s reliance on
Alumax here is consistent with the TAM.
14 Technical advice memoranda “may not be used or cited as
precedent” unless regulations so provide. Sec. 6110(k)(3).
Regulations do not so provide here.
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