The IRS can have a long memory when it comes to rulings and decisions against taxpayers. Even with the seemingly all-purpose economic substance doctrine in its utility belt, the IRS sometimes dusts off old precedents to attack transactions. Revenue Ruling 80-239, 1980-2 C.B. 103, and Basic, Inc. v. United States, 549 F.2d 740 (Ct. Cl. 1977) are two anti-taxpayer authorities that targeted perceived abuses that are now largely obsolete. Nevertheless, the IRS may still invoke these precedents for support in totally different situations. Taxpayers should be aware of how the IRS might use [...]Read more
This advisory discusses how several taxpayers have petitioned or are considering petitioning the Supreme Court of the United States to review their losses at the hands of lower court judges applying the economic substance doctrine.
This advisory is provided on the Alston & Bird website: www.alston.com/advisories/fed-tax-may-2014/