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Finally, we note that because New York corporation law
provides that petitioner, a professional service corporation
engaged in architectural services, may issue shares only to
individuals who are licensed architects in New York State, we
suspect that the treasury shares at the heart of this case were
reacquired by petitioner from Mr. Apgar and Mr. Oliver for the
purpose of circumventing the ownership test of section
448(d)(2)(B) and hence, avoiding application of the 35-percent
flat tax. N.Y. Bus. Corp. Law sec. 1507 (McKinney 2003).
Accordingly, we sustain respondent’s determination.
Decision will be entered
for respondent.
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Last modified: November 10, 2007