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Corp. v. Commissioner, 336 U.S. 422, 437 (1949). In Natl.
Carbide Corp., the Supreme Court held that a parent-subsidiary
relationship does not qualify as an agency relationship unless
the subsidiary corporation’s relationship with its parent
corporation is not dependent on the parent corporation’s
ownership of the subsidiary (the ownership requirement) and the
subsidiary’s business purpose is “carrying on * * * the normal
duties of an agent.” Natl. Carbide Corp. v. Commissioner, supra
at 437. The Supreme Court further held that, if these two
criteria are satisfied, a subsidiary will qualify as an agent of
its parent corporation if (1) the subsidiary acts in the name of
and for its parent corporation, (2) the subsidiary binds its
parent corporation by its actions, (3) the subsidiary transfers
its receipts to its parent corporation, and (4) the income
received by the subsidiary is attributable to the services of its
parent corporation’s employees and assets. Id.
In Bollinger, the Supreme Court revisited the factors
identified and discussed in Natl. Carbide Corp. in deciding
whether a corporate nominee was the agent of several real estate
development partnerships. There the Supreme Court “[declined] to
parse the text of National Carbide” and agreed “that it is
reasonable for the Commissioner to demand unequivocal evidence of
genuineness in the corporation-shareholder context”.
Commissioner v. Bollinger, supra at 349. The Supreme Court
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