it please the court my name is harold a chamber one and i represent positive stepping services think i would like to reserve five minutes of my time for that the commissioner has said that this case was never qualified from the beginning how did you preserve the four fourteen in the argument sir i said how did you preserve the put no to that argument was abandoned and why was it why were you saying it was not abandoned it was not abandoned for three reasons after the statutory notice was issued we raise for fourteen m it is our defense in the petition that was filed and after the government filed their motion for summary judgment we filed a court ordered court ordered objection to the government summary judgment based solely on should still not ruled on my objection to the government's motion for summary judgment and the reason they hadn't the judge had ruled was that it was a court ordered objection and i don't see how the court can grant the summary judgment in the lower court without it least ruling  looking at my objection to the summary judgment motion of the government it's your position that the court was just merely mistaken in its assertion that there was a b the judge is probably one of the business judges in the court he writes all of their major a lot of their major opinions he's a very busy judge within a short time but it was two years after that before he even looked the case again well i don't think i don't think the judge forgot about it during thing i just don't think he looked at it once he mistakenly applied section four fourteen big i think what the judge thought was that why you additionally had brought it up when you had the o because for fourteen controls this case and i have filed an objection and i don't i thought the judge had at least a duty to rule on it even if he ruled against me but he didn't do that no one can make an argument that but for that possible footnote to in the court's opinion it is a short sinked very clear opinion as to how you trace out what goes on here in terms of whether this particular aesop gets to do is it intended to avoid taxes or not yes what is the big problem with the tax court's opinion goes directly to why the court did what they did they the facts of this case are under spewed doctor the based on those facts it is a legal m possibility to find a control group of corporations because no one person owns  ten percent or more of both corporations the only definition of control corporations applicable here under four fourteen now is a brother sister corporation which you could find in an affiliated service group but pasta was exempted from the affiliated service group because it never owned any stock in  did what what did he say there is the application as far as he was concerned and golden gate was concerned when th so if there was never any ownership in him except for the erroneous after being under fifteen sixty thirty then he could not have had a control group of corporations and the service done say that dr hid something from it if you looked at did menstruated record and i'm sure people have it's very clear for forte here for fourteen be a pas if you deploy we lose and a poor fourteen m came into being after four fourteen b and supposedly was to close a loophole and it says it applies to this subsection so she isn't this subsection limited to four fourteen m as opposed to four fourteen it's in general no sum was there for fourteen  case and they were two cases in the tax court where the physician the physician owned fifty percent are less in  the service organization and under the law that was then kiddie and garden were decided for the taxpayer commerce then decided to enact for fourteen m to cure that problem and for fourteen m period that problem because they required only ten percent or more of ownership in the service organization by the attending physician but this case was set out in nineteen eighty after congress ha substantially amended the provisions relating to the use of poor fourteen m by permitting a subchapter s corporation to become and they can't do that because under for fourteen m there is no after buescher of the service of the trust of the aesop to the shareholder just because he's a shareholder there is no such statute on the books and you only get attribution to the doctor when you apply fifteen sixty three  said one question is to roll back to something that you'd said before and now your argument seems his your argument seems to suggest that there's a section for fourteen be ok that is for controlled groups  corporations on one head and you're talking about section four fourteen m for service organizations on the other that use your language is there anything on the books that suggests that it's dual track in other words  can they be mutually exclusive nocive in there they are two statutes applying to the same issue and what what happens is that under under four fourteen b you cannot apply for four tane b unless you have a control group of corporations and if we had their control group the day he signed the they would never have issued a qualification leather if you read our qualification letter it says we are qualified as a tax exempt trustee and the one thing i want to leave the court with if nothing else is that there is absolutely nothing that happened in the year nineteen ninety nine that changed the fact that d own hundred percent of of golden gate and the trust on the hundred percent of the stock and pas and that's important because this court cannot legally fire and that this was a control group of corporations is the stock of the two qualified doctors sobriety in setting up this aesop did exactly what congress had authorized by making and tax exempt trust able to be least accorded to the organ it was abandoned he really think that's the case i mean it looks to me like the twelve apostles twenty two opposition for a declaratory judgment measure for fourteen m twenty thirteen motion for the brief in an entity that has explicitly conceded on brief that it is not and cannot be part of an affiliated service group and i think you discerned that the answer cannot be yes it must not apply the provision speaks of affiliated service groups that the term service organization means an organization principle business of which is the performance of services for purposes of the subsection in other words you only get to subsection three once you're already in am and you can't be on them if you're not and affiliated service group you must be in subsection of the and the tax court correctly followed that path the way here is a qualification for visions are set up you must first qualify under section four on by among other things meeting minimum performance for a minimum participation standards and those are prescribed in section four ten those require counting of the employees who are entitled to participate  in an anti discrimination provision to keep the sops from tilting too heavily in favor of highly compensated employees including employees who own majority shares in the corporations what happened here was that  successful heart surgeon created a separate corporation separated from his surgical practice but we came full ownership of it acquired all the stock to this new corporation which made a subchapter  conveyed that stock to a trust and then sought and obtained qualification for it as a qualified trust so now all of the trust all the stock of the s corp is nominally owned by the  but the same individual is the trustee of the trust the beneficiary of the trust the president of the s corporation the president of the surgical practice and the one hundred percent owner of the surgical practice and that situates him clearly in the category of highly compensated employees that invite scrutiny and says now are you following the nominee discrimination provisions here in arrests are you making sure that all of you who are not highly or at a sufficient number of your non highly compensated employees are allowed to participate and that's when you get to the aggregation provisions and that's what the that's where you need the full fourteen am argument to clear that hurdle because if you are counting employees by the definition set forth and  positive plan can't qualify their lives right if you are treating pozza as an affiliated service group you use a different attribution provision that's from section three eighteen and under that is your say they cannot be affiliated service age thirteen of their briefing page seven if there were five they do not for a moment suggest that posit is an affiliated service and the reason why is as as opposing counsel noted for fourteen an acted in response to several manipulative situations that came before the tax court in the kitty and garland cases where different partnerships were structured that to own enough of each other that they apply to different types of organizations but they you cannot escape the application of for fourteen b or fourteen c for that matter by applying for fourteen that they reach a mutually exclusive outcome in their attribution in circumstances basically limited to the ones before this court in most other aspects they are materially the same and that's because for fourteen hours and acted to include within the provisions of for fourteen we did before fourteen in general to bring within the ambit of a risk those abusive manipulative structures where corporations engineered their ownership of each other to avoid sufficient concentration of ownership in an affiliated service group for fourteen remove that obstacle title that closed up at will call and said even if you're doing this and you're playing this shell game with nominal owners of things we're still going to subject you to participation acquirements in four ten b and here's how we're going to do it we're going to define you as an affiliated service group you will meet this statutory definition which will set forth in here and we're only going to use the three  golden gate and pasta are an affiliated service group but under the plain meaning of the four fourteen am statute pozza is exempted from the quo of occasion as an affiliated service group because they never owned any stock in golden gate and if you understand the case you understand that pastor had to own some stock in golden gate or are the doctors needed to own so stock in golden gate so that there were two people on stock in both entities and that's why emphasize to the court that when have legally have a brother or sister corp and the application of for fourteen m just because it's on the books if you read that statute and understand it clearly it's only a pass to a control group of corporations i mean it doesn't apply to for fourteen control group is he assumed it when he said that the dr was a highly compensated employee possible that didn't have anything to do with anything the records clear that for fourteen years or fourteen or fourteen i'm sorry for poor teen m says that it is applicable only for purposes all service organizations if as the government is arguing that you can you can never have it they're not covered by fourteen m in other words for poor jane m is a much broader stroke think about this from the background when they decided and and legislated poor fourteen m it cured the problem and kiddie and gar you can look at all the everybody row our view article about how smart they were the congress intended to make employee benefits more liberal and one of the way they did this is and if you look at it very closely you can't deny and when the doctor on the fact that there was no common ownership common ownership is the key to this case there is no common ownership by the judge findings and nobody disputes that he ever owned any of of a golden gate the only dispute here is after bishan under fifteen sixty three a because of poor fourteen being which cannot be applied if it's not a control group to begin with if our money thank you sir you very much appreciate your