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deter the type of abuse that respondent perceives the Bender
transaction to be. We need not and do not accept respondent’s
invitation. We are, however, mindful of the precedents and
judicial homilies that support respondent’s position.
The source of most “substance over form” arguments, of
course, is Gregory v. Helvering, 293 U.S. 465 (1935). In oft
quoted language, the Supreme Court framed the issue as follows:
The legal right of a taxpayer to decrease the amount of
what otherwise would be his taxes, or altogether avoid
them, by means which the law permits, cannot be
doubted. But the question for determination is whether
what was done, apart from the tax motive, was the thing
which the statute intended. * * * [Id. at 469;
citations omitted.]
Gregory involved a purported statutory reorganization and
thus is particularly applicable here. Petitioner argues,
however, that “In the 70 years since Gregory was decided, no
court has applied substance-form principles to override technical
compliance supported by business purpose and true economic
effect.” Indeed, in Gregory, the Supreme Court disregarded the
form of a transaction as having no independent significance.
Before elaborating on the application of this principle and “true
economic effect” in this case, we acknowledge the so-called
progeny of Gregory.
Respondent cites Minn. Tea Co. v. Helvering, 302 U.S. 609,
613-614 (1938), in which the Supreme Court stated that “A given
result at the end of a straight path is not made a different
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