Home      Login

Abstract: 

The rescission doctrine, governing when parties can unwind a transaction with retroactive tax effect, has more than its fair share of ambiguities. When the Internal Revenue Service announced in 2012 that it was contemplating providing further guidance on rescission, tax practitioners reacted positively. The Service has now announced, however, that no new guidance will be forthcoming—and that it will not issue private letter rulings on rescission, either. This article considers where that announcement leaves the doctrine, with a 1980 revenue ruling now apparently representing the Service’s only real guidance on rescission.

Keywords: rescission, unwinding, tax avoidance, Revenue Ruling 80-58, Penn v. Robertson, status quo ante

Affiliations:  1: Case Western Reserve University School of Law.