Tax Court's second decision in Brown Group illustrates usefulness of anti-abuse regulations

Article Abstract:

The Tax Court has struggled with the Brown Group case. The first time around, the court held that the Brown Group was not taxable under Subpart F on its controlled foreign subsidiary's distributive share of the income of an 88% owned and controlled foreign partnership. When the IRS loudly complained that the court's opinion effectively repealed Subpart F, the Tax Court at once withdrew its opinion and agreed to rehear the case. In a new decision issued on January 25, 1995, the Tax Court found that the Brown Group was taxable on the income in question, but it did not give any real consensus as to why. The Tax Court might have had an easier time if the anti-abuse regulations had been in effect during the year in issue. The anti-abuse regulations permit the IRS to treat a partnership as an aggregation of its partners, where appropriate, to carry out the purpose of any provision of the Code or regulations.

Public Finance Activities, Other Footwear Manufacturing, Nonrubber Footwear, Footwear, Except Rubber, Corporate Income Taxes, Cases, International business enterprises, Multinational corporations, Footwear industry, Footwear, BG, United States. Tax Court, Brown Group Inc.

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International Developments - Treasury, IRS Target International Issues

Article Abstract:

The Department of Treasury and the Internal Revenue Service work to develop a workable set of (anti-abuse) rules to govern the partnerships that have ties to both the United States and to foreign countries.

Partnerships, Laws, regulations and rules, Partnership, Tax evasion, Foreign source income taxation, United States. Department of the Treasury

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International Developments

Article Abstract:

Limited Liability Companies (LLCs) may now be treated as partnerships and not as an association taxable as a corporation, under new regulations of the Internal Revenue Service.

Other Justice, Public Order, and Safety Activities, Limited Liability, Taxation, Economic policy, Limited liability companies

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