Paul L. Caron

Tuesday, October 26, 2010

Abrams: Economic Substance and the Partnership Anti-Abuse Rule

Howard Abrams (Emory) has posted Did Codification of Economic Substance Repeal the Partnership Anti-Abuse Rule?, 51 Tax Mgmt. Mem. 299 (2010), on SSRN. Here is the abstract:

Since codification of the economic substance doctrine in March of 2010, representatives of the Treasury department have assured taxpayers that no change in substantive law was intended, and the statutory language is relatively narrow. But courts have used the phrase “economic substance” for a variety of anti-abuse doctrines, and several commentators have suggested that the new statutory language can encompass them all. The precise reach of the codified economic substance doctrine is important because of the new penalty regime that is triggered by a failure to satisfy the codified economic substance doctrine, and I argue that the breadth of the new penalties strongly supports a narrow reading of the codification language.

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