Congressional hearings regarding Apple’s tax planning strategies highlighted some of the methods that companies are using to reduce their federal tax burden. Last year, a story in the New York Times focused on the company’s strategy for avoiding taxes in California and several other states. Of course, devising plans to avoid taxes is as old as taxes themselves. The states have adopted various methods for combating corporate tax planning strategies that they deem to be abusive. Among the weapons in many states’ arsenals is the economic substance or sham transaction doctrine, which allows them to ignore or re-characterize certain transactions. But it is often unclear to taxpayers which type of corporate reorganizations or other transactions will fall prey to the sham transaction doctrine. The lack of certainty in this area can cast a cloud over legitimate planning techniques.

The speakers will cover:

• federal and state common law doctrines that limit taxpayers ability to reduce or avoid taxes
• specific components of the economic purpose and business substance doctrine
• “substance over form” doctrine
• federal codification of the economic substance doctrine
• state codification of the economic substance doctrine
• application of the state economic substance doctrine in various state tax cases
• best practices for avoiding or withstanding scrutiny under the economic substance doctrine

This is a recorded webinar that originally ran live on July 23, 2013. As an eLearning course, you must pass the final exam of this course to receive CPE credit.

Course Level: Intermediate

Course Prerequisites: Basic understanding of state tax issues

Delivery Method: Self-study

Published: 08/30/2013

At the conclusion of this course, you will:

• understand the limitations imposed on the right of entities to avoid taxes;
• identify the key components of the economic substance or business purpose doctrine, including the genesis and development of these legal theories;
• incorporate into transaction and structural planning the differences between federal and state codification of the economic substance or business purpose doctrine;
• have a working knowledge of the “substance over form” doctrine; and
• be able to apply the discussed doctrines to relevant business transactions or planning concepts.

CPE

1.5

CLE

N/A