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Articles 1 - 2 of 2
Full-Text Articles in Law
Tax Court Find Stars Transaction Lacks Economic Substance, Robert D. Probasco, Lee S. Meyercord
Tax Court Find Stars Transaction Lacks Economic Substance, Robert D. Probasco, Lee S. Meyercord
Faculty Scholarship
In Bank of New York Mellon Corp. v. Commissioner, the Tax Court found that a structured trust advantaged repackaged securities (“STARS”) transaction entered into by BNY Mellon lacked economic substance, and disallowed foreign tax credits of $199 million as well as transactional expenses of $8 million. BNY Mellon is the first test case to emerge from the IRS’s attempts to disallow tax benefits to several financial institutions that participated in the STARS transaction.
The STARS transaction is one of a number of different transactions that the IRS refers to as “foreign tax credit generators.” These transactions generally rely on inconsistent …
Navigating Tefra Partnership Audits In Multi-Tiered Entity Structures, Mary A. Mcnulty, Robert D. Probasco, Lee S. Meyercord
Navigating Tefra Partnership Audits In Multi-Tiered Entity Structures, Mary A. Mcnulty, Robert D. Probasco, Lee S. Meyercord
Faculty Scholarship
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) established a unified procedure for determining the tax treatment of partnership items at the partnership level rather than the partner level. Although these rules addressed a serious and real administrative problem in the assessment of partnership level deficiencies, they also created a complex process with many new problems and potential traps. One particularly unique set of challenges arises in the context of multi-tiered entities.
Multi-tiered entities are partnerships that have a partnership or other pass-through entity as a partner. The pass-through partner is commonly referred to as a “tier,” and …