Tax & Tax Controversy Articles

DIEBOLD and the Not So Beautiful: Transferee Liability Trumps Tax Shelter

The Second Circuit, in Diebold v. Commissioner, describes the requirements for finding transferee liability under Section 6901, here specifically under New York law, as state law predominates the determination of whether a person will be liable for federal taxes as a transferee. This case involved a so-called “Midco”transaction, whereby the goal was to avoid the corporate level taxes on the disposition of the assets of a C-corporation.

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On Historic Boardwalk: Substance is Key Regarding Partner Status

The core issue in Historic Boardwalk was whether an investor in a partnership would be considered to be a partner and as such would be eligible to receive an allocation of historic rehabilitation credits. More specifically, the question was whether the parties, a New Jersey state agency and a subsidiary of Pitney Bowes Corporation, acting with a business purpose, intended to join together as partners in a profit-making activity and share the gains and losses.


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