Cabot Corporation v. United States

The plaintiff-appellant came into existence as the result of a single transaction merging prior corporations. It would fractionate that single transaction into taxable and non-taxable parts in order to minimize the stock issue and transfer taxes imposed by §§ 4301 and 4321 of the Internal Revenue Code of 1954. The fact that the end might have been accomplished by two separate transactions only one of which would subject the plaintiff-appellant to tax is beside the point. See *754 Founders General Corp. v. Hoey, 300 U.S. 268, at page 275, 57 S.Ct. 457 at page 460, 81 L.Ed. 639 (1937), in which the Court rejected a taxpayer’s suggestion that he might have attained his purpose by a form of transaction which would not have subjected him to stamp taxes saying: “The suggestion, if true, furnishes no reason for relieving him of tax when, for whatever reason, he chooses a mode of dealing within the terms of the Act. [citation of eases omitted] To make the taxability of the transaction depend upon the determination whether there existed an alternative form which the statute did not tax would create burden and uncertainty.” We affirm on the opinion of the court below. 200 F.Supp. 261 (1963).

Judgment will be entered affirming the judgment of the District Court.