MEMORANDUM FOR PROFESSOR SNYDER
FROM:
DATE:
SUBJECT: The Tax Court case of Evelyn F. Gregory, 27 BTA 223 (1932)
Issue: The case Helvering v. Gregory involved the question of avoidance or reduction of U.S. Federal
Tax law based on the business purpose doctrine and the doctrine of substance over form. Evelyn Gregory
was the owner of all shares of a company called United Mortgage Corporation (United). She tried to
create a corporation for the sole purpose of making an individual profit and decreasing the amount of her
federal income tax.
Facts: Within the assets of United, it held 1,000 shares of the Monitor Securities Corporation (Monitor).
Gregory sought a reorganization under section 112 (g) of the Revenue Act of 1928, c. 852, 45 Stat. 791,
816, 818, 26 USCA § 2112 (g)
1
. On September 18, 1928, she created Averill Corporation (Averill) to
procure a transfer of shares to sell them for personal profit and to diminish the amount of income tax
