- 46 -
same business by the (deemed) branch or division of the parent.
We interpret our statement in Acro Manufacturing Co. v.
Commissioner, 39 T.C. at 386, that the taxpayer “neither acquired
nor used the Button assets in its business” as tantamount to a
statement that the Button business never became an operating
branch or division of the taxpayer. Therefore, the Secretary and
the Commissioner, in effect, rejected our position in that case
by issuing section 301.7701-2(a), Proced. & Admin. Regs., as well
as Rev. Rul. 75-223, Rev. Rul. 77-376, and G.C.M. 37,054.20
Finally, we note that, consistent with his admonition in the
preamble to the final check-the-box regulations, T.D. 8697, 1997-
1 C.B. at 216, that “Treasury and the IRS will continue to
monitor carefully the uses of partnerships [and, by extension,
disregarded entities] in the international context and will take
appropriate action when * * * [such entities] are used to achieve
results that are inconsistent with the policies and rules of
20 Because of Rev. Rul. 75-223, 1975-2 C.B. 109, and its
progeny, petitioner’s interpretation of sec. 301.7701-2(a),
Proced. & Admin. Regs., as requiring the post-(deemed)
liquidation business activities of H&C to be considered business
activities of Dover UK immediately following the deemed
liquidation of H&C is certainly a plausible interpretation of
that regulation. As we stated in Corn Belt Hatcheries of Ark.,
Inc. v. Commissioner, 52 T.C. 636, 639 (1969), in sustaining the
taxpayer’s plausible interpretation of an ambiguous ruling,
“[t]axpayers are already burdened with an incredibly long and
complicated tax law. We see no reason to add to this burden by
requiring them anticipatorily to interpret ambiguities in
respondent’s rulings to conform to his subsequent
clarifications”.
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