New IRS Internal Guidance on Codified Economic Substance Doctrine Offers Some Plusses for Taxpayers
Author: Rocco Femia.; David Zimmerman.; David Blair.; George Clarke.; Joseph Helm.
Source: Volume 29, Number 01, Fall 2011 , pp.31-36(6)
< previous article |next article > |return to table of contents
Abstract:
New IRS internal guidance on economic substance doctrine, although non-binding, offers comfort to taxpayers whose investment transactions might trigger application of the doctrine. In addition to a “safe harbor” listing, LB&I-4-0711-015 raises the threshold for assessing penalties, requires careful internal IRS deliberation before application of the doctrine, and institutes a “heads-up” notice to taxpayers— plus a chance to dispute application before the fact.Keywords: economic substance; IRC Section 7701(o); LB&I-4-0711-015; economic substance penalty
Affiliations:
1: Miller & Chevalier; 3: ; 5: jhelm@milchev.com.