Wednesday, August 18, 2010
Sarah E. McNally
(Godfrey & Kahn, Milwaukee) has published Vainisi v. Commissioner: A Tax Victory for S Corporation and QSub Banks
, 127 Banking L.J. 501 (2010). Here is the abstract
The Seventh Circuit Court of Appeals, in Vainisi v. Commissioner, [599 F.3d 567 (7th Cir. 2010), rev’g, 132 T.C. No. 1 (Jan. 15, 2009).] held that S corporation and QSub banks with a C corporation history are not subject to the TEFRA interest expense disallowance under § 291 of the Code once they have been S corporations or QSubs for three years. Implicit in the court’s reasoning is that S corporation and QSub banks without a C corporation history are never subject to the TEFRA interest expense disallowance rules. Here, the author explains the significance of this important decision.