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The Sham Trust Doctrine – When will a Court Disregard a Trust for Federal Tax Purposes?

In Economic Substance, Sham Trust, Trust by Jason FreemanLeave a Comment

When will a court disregard a trust for federal tax purposes?  The Tax Court’s recent opinion in Wegbreit v. Commissioner demonstrates the pitfalls when a court finds that a trust should be disregarded for tax purposes.   But first of all: What is a trust? A trust is an entity or relationship created and governed under state (or other) law. …

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What is “Economic Substance?”

In Economic Substance by Jason Freeman and Alex AillsLeave a Comment

The economic substance doctrine has long been a part of the tax law. Although it was only codified in the Internal Revenue Code in 2010,[1]the doctrine has been used by the IRS and courts for years to disregard non-compliant transactions.[2]This post provides a brief primer on the economic substance doctrine, the interplay between the statute and the case law that …

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The Eleventh Circuit Weighs in on the United States Virgin Islands’ Economic Development Tax Credit

In Economic Substance by Jason FreemanLeave a Comment

The Eleventh Circuit Court of Appeals recently remanded a closely-watched case dealing with territorial tax credits under the United States Virgin Islands’ Economic Development Commission Program that involved an important statute of limitations issue. Comm’r v. Estate of Travis Sanders, No. 15-12582 (Aug. 24, 2016). The primary issue in the case was whether the taxpayer, Mr. Sanders (now deceased), qualified …