Remarks on anti-abuse rules

Article Abstract:

The IRS has unconvincingly attempted to justify anti-abuse regulations, such as those that accompany recent partnership regulations, on the grounds that such catch-all provisions allow the IRS to carry out the intent of Congress. When tax legislation is passed, only a small percentage of Members of Congress hold any specific intent regarding the provisions that are passed. Even a "reasonable legislator" standard creates an unacceptable fiction. Congressional intent should not be used to justify IRS attacks on transactions that comply with the letter of the law.

Tax Law, Public Finance Activities, Tax evasion, Taxpayer compliance

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The final partnership anti-abuse regulation: the Treasury redefines the "intent of Subchapter K."

Article Abstract:

The IRS issued final regulations on Dec 29, 1994 that link partnership transactions with the intent of Subchapter K for the purpose of determining tax avoidance intentions. Therefore, it is important to clearly document the current and initial business purpose and ensure that tax benefits do not exceed those standard in the industry. These regulations may be used to review partnership status both for new and already established partnerships so evaluation by a tax practitioner is advisable.

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The limits of literalism: the effect of substance over form, clear reflection and business purpose considerations on the proper interpretation of Subchapter K

Article Abstract:

The partnership anti-abuse rule's application of a business purpose requirement and a proper reflection of income standard is inappropriate and misinterprets Subchapter K. The rule's interpretative matrix disregards Subchapter K's plain and literal meaning. The rule undercuts Congress's authority while misapplying the substance and purpose doctrines and creating a proper reflection of income standard not found in the IRC or case law.

Taxation

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