JD Supra

Tax Court confirms codified economic substance doctrine requires threshold relevancy determination, upholds 40% strict-liability penalty

Patel v. Commissioner, 165 T.C. No. 10 (Nov. 12, 2025), gave the US Tax Court its “first opportunity to examine when the codified economic substance doctrine applies.” Patel at *16. The Tax Court made ...
JD Supra

U.S. Tax Court Holds that § 7701(o) Requires Threshold Relevancy Determination Before Applying Two-Prong Economic Substance Test

The Tax Court unanimously held that § 7701(o) requires a threshold relevancy determination before applying the two-prong economic substance test. In Patel v. Commissioner, the United States Tax Court ...