• Third Circuit Court of Appeals Strikes Down Tax Credit Transaction, Reverses Tax Court
  • September 11, 2012 | Authors: Jeffrey G. Davis; Robert L. Mendenhall
  • Law Firms: Mayer Brown LLP - Washington Office ; Mayer Brown LLP - Charlotte Office
  • On August 27, 2012, the US Court of Appeals for the Third Circuit struck down a historic rehabilitation tax credit transaction, handing a victory to the government and dealing a blow to the taxpayer. In reversing the US Tax Court, the Third Circuit held that the private investor in a public-private partnership was not a “true” partner because it had “no meaningful stake” in the success or failure in the partnership’s enterprise, essentially disallowing the tax credits allocated to the private investor.