Monday, February 06, 2006

IRS issues statement on Fourth Circuit's Black and Decker Decision

My post on the Black and Decker decision can be found here.

The government's statement on the opinion is as follows:

Today's decision by the U.S. Fourth Circuit Court of Appeals will help to maintain the integrity of our federal tax system. The decision reverses the trial court's summary allowance of over $560 million in loss deductions claimed by the Black & Decker Corporation as a result of a 'contingent liability' tax shelter-a tax shelter that was widely marketed to other companies. In remanding the case for trial, the decision gives the government the opportunity to prove that the transaction was a sham, devoid of any economic substance apart from the tax consequences. Those who pay the amount of tax the law requires deserve the assurance that we will take all appropriate steps to stop the proliferation of abusive tax avoidance schemes that undermine the integrity of our nation's tax laws."

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