When Can Taxpayers Invoke the Substance-Over-Form Doctrine?
Author: Erik M. Jensen.
Source: Volume 38, Number 03, Spring 2021 , pp.75-86(12)
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Abstract:
This article considers the circumstances under which taxpayers can disavow the form of a transaction they enter in order to claim better tax consequences based on the substance of the transaction. In some situations, the disavowal is noncontroversial because the Internal Revenue Service has blessed the transactions. In a few situations where the Service resists, however, taxpayers are sometimes successful anyway. The focus of the article is on the Tax Court’s 2021 decision in Complex Media, Inc. v. Commissioner, and substantial discussion is devoted to the Third Circuit’s well-known, and sometimes controversial, 1967 decision in Commissioner v. Danielson.Keywords: Complex Media, Inv. v. Commissioner, Commissioner v. Danielson, Zenz v. Quinlivan, step-transaction doctrine, Watts v. Commissioner
Affiliations:
1: Case Western Reserve University School of Law.