Guardian Industries Corp. and Subsidiaries v. U.S.

Guardian Industries Corp. (plaintiff) was a domestic corporation that was the parent corporation for a group of subsidiaries collectively called Guardian. Guardian manufactured glass products for commercial and residential use. Guardian conducted business in Luxembourg through a subsidiary named IHC, the sole stockholder of Guardian Industries Europe, S.a.r.l. (GIE), an entity organized in Luxembourg. GIE then owned controlling interests in several other corporations (collectively, the Guardian Luxembourg Group). GIE filed Form 8832 with the Internal Revenue Service to be disregarded as a foreign entity from IHC, which was approved. In 2001, GIE (or IHC) made advance payments to Luxembourg for 2001 taxes of 3,429,074 Euros for the Guardian Luxembourg Group. Guardian then filed its American income tax return. Guardian regarded the Luxembourg tax as allocable pro rata and claimed a refund of $2,855.214. In its statement with the request for a refund, Guardian advised that pursuant to Luxembourg law, none of the other Luxembourg corporations had any liability for the Guardian Luxembourg Group income taxes, and the entire tax paid must be treated as paid or accrued by GIE. The United States (defendant) differed from this position, arguing that Luxembourg law actually did not clearly establish that GIE was the only entity liable for the taxes, and accordingly, as foreign income taxes are considered paid by the person or entity with a legal liability, Guardian was not entitled to a refund. Both parties cross-moved for summary judgments.