IRS Official: 'Canal Corp.' Case Doesn't Invalidate Leveraged Partnerships

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A controversial 2010 Tax Court ruling that a leveraged partnership transaction came under the tax code Section 752 anti-abuse rule as a disguised sale does not invalidate all leveraged partnership structures, an IRS official says. Speaking at a Practising Law Institute tax planning program, Clifford M. Warren, special counsel to the IRS associate chief counsel (passthroughs and special industries), says the case, Canal Corp. v. Commissioner, 135 T.C. No. 9 (2010), shows why IRS has the anti-abuse rule.