Fairfax Auto Parts of Northern Virginia, Inc. v. Commissioner of Internal Revenue, Fairfax Auto Parts, Inc. v. Commissioner of Internal Revenue

The Commissioner of Internal Revenue appeals a decision of the Tax Court 1 holding invalid a provision of the Treasury Regulations defining a brother-sister control group under § 1563(a)(2) of the Internal Revenue Code of 1954 2 and disallowing the assessment of deficiencies.

Control of the two corporations in question was as follows: William Herbert owned 100% of Fairfax Auto Parts, Inc., and 55% of Fairfax Auto Parts of Northern Virginia, Inc.; Joseph Ofano had no interest in the first corporation, but owned 45% of Fairfax Auto Parts of Northern Virginia, Inc. The Commissioner determined…