Seattle Hardware Company v. Clark Squire, Collector of Internal Revenue

We think the trial court correctly disposed of this matter. Appellant argues earnestly that the decision is at variance with National Carbide Corp. v. Commissioner, 336 U.S. 422, 69 S.Ct. 726, but a study of the latter opinion persuades us that the situation it dealt with is easily distinguishable. In the National Carbide case the subsidiary corporation utilized were major operating and manufacturing companies set up on a permanent basis. The court stressed their huge individual earnings and the great numbers of their employees as evidence that they were not functioning as mere agents of the…