TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, June 7, 2007

IRS Moves to Close IBM "Killer B" Tax Shelter

The New York Times and Wall Street Journal report today that the IRS has moved in Notice 2007-48 to stop the "Killer B" corporate tax shelter deployed by IBM to save over $1.6 billion in income tax. IBM used a foreign subsidiary to buy back shares through foreign exchanges. The subsidiary then used the shares to pay its corporate parent in America for goods and services.  The shelter is intended to circumvent the § 367(b) rules on repatriated earmings.  See:

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