United States v. Vogel Fertilizer Co. (455 U.S. 16)
U.S. Supreme Court · decided January 13, 1982 · Supreme Court Database (Spaeth)
- Citation
- 455 U.S. 16 · 102 S. Ct. 821
- Decided
- January 13, 1982
- Term
- October Term 1981
- Vote
- 7–2
- Majority author
- Justice Brennan
- Issue area
- Federal Taxation
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice Brennan delivered the opinion of the Court. Section 1561(a) of the Internal Revenue Code of 1954, 26 U. S. C. § 1561(a), limits a “controlled group of corporations” to a single corporate surtax exemption. Section 1563(a)(2) provides that a “controlled group of corporations” includes a “brother-sister controlled group,” defined as “[t]wo or more corporations if 5 or fewer persons . . . own. . . stock possessing (A) at least 80 percent of the total combined voting power ... or at least 80 percent of the total value ... of each corporation, and (B) more than 50 percent of the total combined voting power ... or more than 50 percent of the total value ... of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.” The interpretation of the statutory provision by Treas. Reg. § 1.1563-l(a)(3), 26 CFR § 1.1563-1(a)(3) (1981), is that the “term ‘brother-sister controlled group’ means two or more corporations if the same five or fewer persons . . . own . . . singly or in combination” the two prescribed percentages of voting power or total value. The question presented is whether the regulatory interpretation — that the statutory definition is met by the ownership of the prescribed stock by five or fewer persons “singly or in combination” — is a reasonable…
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