The Valley Camp Coal Company v. Commissioner of Internal Revenue

The petitioner was the lessee of the mineral rights of the Alexander Mine in Marshall County, West Virginia. After operating this mine, the petitioner subsequently purchased the mine from the owner-lessor, utilizing its wholly owned subsidiary as a conduit for payment of the purchase price and to hold the legal title. The Tax Court found that no valid business purpose was served by allowing the subsidiary to hold the legal title and that the sole purpose of handling the transaction in this manner was tax avoidance.

We hold that the findings of fact and the inferences drawn therefrom by the Tax…