dissenting:
Without exception, the other Circuit Courts that have considered, the meaning of the 80% test under Section 1563(a)(2)(A) have decided contrary to the majority opinion expressed here. At present, three Circuits have held that the 80% test, which constitutes part of the definition of a brother-sister controlled group, is not limited by a common ownership requirement. Thus, a person’s stock ownership in a corporation may be counted for purposes of satisfying the 80% test, even if that person does not own stock in each member of the controlled group. Allen Oil Co. v. Commissioner, 614 F.2d 336 (2d Cir. 1980); Yaffe Iron & Metal Corp. v. United States, 593 F.2d 832 (8th Cir.), cert. denied, 444 U.S. 843,100 S.Ct. 85, 62 L.Ed.2d 55 (1979); T.L. Hunt, Inc. v. Commissioner, 562 F.2d 532 (8th Cir. 1977); Fairfax Auto Parts of Northern Virginia, Inc. v. Commissioner, 548 F.2d 501 (4th Cir.), cert. denied, 434 U.S. 904, 98 S.Ct. 300, 54 L.Ed.2d 190 (1977).
As recognized by the majority opinion, this Court may not invalidate Treasury Regulation 1.1563-1(a)(3), which specifically disclaims any common ownership requirement for the 80% test, unless it is unreasonable and clearly inconsistent with the statute. Although imposing a common ownership requirement upon the 80% test might be viewed as the better result, it is by no means mandated by the wording of Section 1563(a)(2)(A) or by the legislative history. Both the language of the statute and the legislative history can be interpreted so as to support the Treasury Regulation. See Vogel Fertilizer Co. v. United States, No. 69-78 (Ct.Cl. Aug. 13, 1980) (Smith, J., dissenting). Consequently, the Treasury Regulation is neither unreasonable nor plainly inconsistent with the statute.
For the reasons stated in Allen Oil, and those additional reasons expressed by Judge Smith in his dissent in Vogel Fertilizer, I respectfully dissent.