By Phil Karter Senator Carl Levin (D-Mich.) may have tried to take a bite out of Apple (AAPL) in congressional hearings last May examining the company’s overseas tax structure, calling it “the holy grail of tax avoidance." However, it appears that more than just Irish eyes are smiling on the company these days, for in … Continue reading Apple’s Double Irish With A Dutch Sandwich Goes Down Easy with SEC
By Phil Karter Any corporate tax executive who has ever been involved in contesting an audit adjustment knows all too well how unfavorable documents relating to the subject of the adjustment – particularly improvident comments reflected in email correspondences – can be an ongoing impediment to resolving a tax dispute from the audit phase right … Continue reading Cleaning Up After The Elephants – A Practical Reminder On Document Preservation Policies and Litigation Holds In Tax Disputes
By David J. Shakow On March 25, the Supreme Court accepted certiorari in U.S. v. Gary Woods. (Supreme Court order) The issue presented to the Court arose from a split in the Circuits over whether a taxpayer can avoid the valuation misstatement penalties of section 6662(e) and (h) by conceding that there was no economic substance … Continue reading Supreme Court’s Review of Valuation Misstatement Penalty Leaves the Door Open for Appellants
By Phil Karter With the looming increase in tax rates on investment income and capital gains in particular, a large number of stock market investors have been selling long-term positions to lock in the 2012 rate, which currently tops out at 15%. Come January 1,2013, gain on the same sale could be taxed at a … Continue reading Could The New Economic Substance Statute Apply To End-Of-Year Stock Sales And Repurchases?
By Jonathan Prokup Two weeks ago, the Fifth Circuit summarily rejected a taxpayer request for an en banc rehearing in Southgate Master Fund LLC v. United States. The appellate court had previously concluded that the taxpayer was not entitled to a claimed capital loss from a transaction involving the acquisition of distressed debt via a … Continue reading Southgate Master Fund: The Sham Partnership Doctrine Gets Messy… Or Does It?
By Jonathan Prokup The Third Circuit yesterday issued a harshly worded rebuke to the taxpayer in Merck v. United States, No. 10-2775 (Jun. 20, 2011), affirming the District Court’s decision that the taxpayer’s swap-and-assign transaction was really a disguised loan that gave rise to Subpart F income. (See TaxProfBlog for a link to the opinion.) … Continue reading Merck (Shering Plough) v. U.S.: Will One Taxpayer’s Loss Benefit Other Taxpayers Grappling With The Codified Economic Substance Doctrine?
Since codification of the economic substance doctrine in March 2010, taxpayers have expressed fears that IRS will assert the doctrine unpredictably, resulting in an in terrorem effect among taxpayers because of the lack of clear authorities interpreting the doctrine and the new 40% strict-liability penalty for falling on the wrong side of it. To promote … Continue reading Will IRS Limit Exam’s Assertion of the Economic Substance Penalty? TIGTA Report Suggests Not.