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Sections 265(a)(2) and 246A Have Similar Objectives, But the Overlap Is Not Perfect and IRS Initiatives May Raise Additional Issues  


Author:  Edward J. Schnee.; W. Eugene Seago.


Source: Volume 25, Number 02, Winter 2008 , pp.61-75(15)




Journal of Taxation of Investments

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Abstract: 

Many of today’s tax shelters are complex multi-step transactions involving foreign or other accommodating parties. These transactions take advantage of poorly drafted provisions or ones that leave important issues unresolved. Many of the older tax shelters simply attempted to create ordinary deductions while generating tax-exempt or tax preferenced income. Over time Congress has enacted numerous provisions to close down these shelters. The recent case of OBH, Inc. v. U.S. examined the effectiveness of Section 246A to stop one of these older transactions.

Keywords: 

Affiliations:  1: University of Alabama; 2: Virginia Polytechnic and State Univ.

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