• Tax-Advantaged Transactions: Controversy and Planning Abound
  • April 9, 2007 | Authors: J. Walker Johnson; Mark J. Silverman; Lisa M. Zarlenga
  • Law Firm: Steptoe & Johnson LLP - Washington Office
  • The 2006 Federal Circuit Court of Appeals ruling in Coltec Industries, Inc. v. United States has given the Internal Revenue Service another weapon in its aggressive enforcement efforts against taxadvantaged transactions that are specifically structured to create corporate tax losses and deductions. The Coltec decision was notable because it disallowed a capital loss on a transaction that the court acknowledged was technically correct under the Internal Revenue Code. It thus supports IRS enforcement strategies that take the broadest possible interpretation of prohibited transactions, seek to impose the maximum penalties for them -- and essentially challenge the concept of tax planning.By Counsel to Counsel Editor John M. Toth