Marc's Big Boy-Prospect, Inc. v. Commissioner
United States Tax Court
WBB obtained a restaurant franchise for the State of Wisconsin. It set up and, in one case, acquired from its shareholders, wholly owned subsidiaries each for the purpose of operating restaurants under a subfranchise agreement. WBB also set up two corporations as commissaries to serve the restaurants. Each subsidiary was so completely managed and controlled by WBB that WBB, in effect, earned the income arising from their operation.
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WBB obtained a restaurant franchise for the State of Wisconsin. It set up and, in one case, acquired from its shareholders, wholly owned subsidiaries each for the purpose of operating restaurants under a subfranchise agreement. WBB also set up two corporations as commissaries to serve the restaurants. Each subsidiary was so completely managed and controlled by WBB that WBB, in effect, earned the income arising from their operation. Held, the Commissioner's allocations to WBB of all the gross income and deductions of the subsidiaries under sec. 482 were not arbitrary, capricious, or…
1Opinion of the Court
OPINION
Respondent assessed deficiencies against WBB under sections 61 and 482 by including in WBB’s gross income and deductions the gross income and deductions of all the other petitioners plus those of Layton, Manitowoc, and Green Bay in order to prevent evasion of taxes and to reflect WBB’s income clearly.
Respondent relies primarily on section 61 and alternatively on section 482. If he is correct under either, it is unnecessary for us to consider the other or to consider respondent’s other alternative positions based on sections 269 and 1561 regarding the surtax exemptions of petitioners…
2Cases cited32 opinions
- Helvering v. TaylorSupreme Court of the United States · 1935
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Burnet v. HoustonSupreme Court of the United States · 1931
- National Carbide Corp. v. CommissionerSupreme Court of the United States · 1949
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3Cited by32 opinions
- Foster v. Comm'rUnited States Tax Court · 1983
- Ross Glove Co. v. CommissionerUnited States Tax Court · 1973
- Huber Homes, Inc. v. CommissionerUnited States Tax Court · 1971
- Hospital Corp. of America v. CommissionerUnited States Tax Court · 1983
- Brittingham v. CommissionerUnited States Tax Court · 1976
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