Judge: Tax Planning ‘Under Siege' as Regulators Crack Down on Shams

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Tax planning is “under siege” following the expansion of tax motivated transactions without substance, U.S. Tax Court Judge Joseph R. Goeke said at a June 19 conference sponsored by the Tax Audits and Litigation Committee of the District of Columbia Bar Taxation Section.
Goeke was responding to questions by moderator Kevin R. Stults, counsel at Bingham McCutchen LLP, regarding the effect of the codification of economic substance on the Tax Court's approach to the issue.
The judge said the biggest trend is the uniform nature with which the courts of appeal have approached economic substance cases. The appeals courts have been finding uniformly that “manufactured schemes imposed on existing business structures” do not have economic substance, Goeke said.