Wednesday, January 31, 2007
The Government today won a Bond Linked Issue Premium Structure ("BLIPS") tax shelter case, Klamath Streategic investment Fund, LLC v. United States, No. 5:04-CV-278 (D.C. E.D. TX 1/31/07). Here is the Conclusion:
The court finds that the loan transactions lacked economic substance and are, therefore, disregarded for federal income tax purposes. The court also finds that no penalties are applicable. The parties are directed to confer and submit, within 15 days, a proposed form of judgment (agreed if possible) consistent with this opinion. The parties shall take into account their apparent agreement that the plaintiffs are entitled to deduct operational expenses.