I am looking for the definition of a "Control Group". If an organization forms a partnership which does not involve a merger of assets, but has a common board at the holding company level, would this fall under the definition of a control group?

Who are the partners in the partnership? Do these partners have any ownership in the holding company or does the holding company have ownership in the partnership?

Controlled groups (CG) are defined in Code Sec 414(b) & ©. To be a controlled group there generally has to be a certain level of common ownership. There are brother-sister controlled groups and parent-sub controlled groups. Each involves a specific test being applied to the ownership percentages. The trick though is that ownership is not just direct ownership. Code Section 1563(e) determines who is deemed to be an owner for these tests. An individual can be attributed stock from his/her spouse, children, corporations, partnerships, estates, trusts or options. The rules for whether certain interests are or are not attributed are very specific and also can depend on the individual's direct ownership percentage level. Controlled group situations can also apply to tax-exempt organizations by determining if control exists through common directors or trustees.

There are also rules concerning Affiliated Service Groups to be aware of in Code Sec. 414(m). A group of companies can be considered an ASG without any common ownership. These rules generally apply to service organizations that have a separate company performing services for or with them. Being an ASG can have the same effect as being a CG. There are also very specific tests to apply for ASG rules.

As you can tell, this is a very complex area, that requires careful examination of all ownership relationships that exist.