United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 19, 2007
Charles R. Fulbruge III
Clerk
No. 06-50747
WRS GROUP LTD; SJS PARTNERSHIP,
Plaintiffs-Appellants,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Texas
6:05-CV-166
Before GARWOOD, SMITH and DEMOSS, Circuit Judges.
PER CURIAM:*
We agree with the district court that under the form of the
transactions at issue the amounts paid were for the sale of the
stock and not compensation for personal services, and that under
C.I.R. v. Danielson, 378 F.2d 771 (3d Cir. 1967) – which we adopted
in Spector v. C.I.R., 641 F.2d 376, 384-86 (5th Cir. 1981) – the
*
Pursuant to 5TH CIR. R. 47.5 the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Commissioner can insist on the form of the transaction as selected
by appellant notwithstanding appellant’s contention that it does
not reflect the underlying economic realities and notwithstanding
that the sellers were departing employees and minority stockholders
of appellant’s predecessor. See, e.g., Nestle Holdings, Inc. v.
C.I.R., 152 F.3d 83, 87 & n.4 (2d Cir. 1998). We further agree
with the district court that appellant has not made a sufficient
showing of mistake, fraud or undue influence to support, as between
the parties to the transaction, a judicial recasting of it as in
substance sought by appellant. See Spector at 386. The judgment
of the district court is
AFFIRMED.
2