Abstract

http://ssrn.com/abstract=1647666
 


 



What Would Henry Simons Do?: Using an Ideal to Shape and Explain the Economic Substance Doctrine


Charlene D. Luke


University of Florida - Fredric G. Levin College of Law


Houston Business and Tax Law Journal, Forthcoming
University of Florida Levin College of Law Research Paper No. 2010-18

Abstract:     
This Article discusses the potential results of injecting the Haig-Simons (H-S) income concept into the debate over the economic substance doctrine (ESD) - a debate that seems unlikely to diminish in spite of the recent codification of the ESD. The conclusion reached is that the H-S income concept could provide an organizing principle for anchoring the ESD’s substantive content and defining its role in tax litigation and planning. This Article proposes an H-S ESD that would move away from the current ESD’s approach of disregarding an entire transaction as a substantive sham to an approach that taxes whatever a transaction actually accomplished, as measured using the H-S concept. Application of the proposed H-S ESD to five case studies (Knetsch, ACM, Castle Harbour, Compaq, and UPS) suggests possible additional benefits of thinking about tax-avoidance transactions in terms of H-S: it may help delineate the boundaries of the ESD’s applicability to suspect transactions, and it may help explain the outcomes of ESD cases.

Number of Pages in PDF File: 98

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Date posted: July 24, 2010  

Suggested Citation

Luke, Charlene D., What Would Henry Simons Do?: Using an Ideal to Shape and Explain the Economic Substance Doctrine. Houston Business and Tax Law Journal, Forthcoming; University of Florida Levin College of Law Research Paper No. 2010-18. Available at SSRN: http://ssrn.com/abstract=1647666

Contact Information

Charlene D. Luke (Contact Author)
University of Florida - Fredric G. Levin College of Law ( email )
P.O. Box 117625
Gainesville, FL 32611-7625
United States
352.273.0658 (Phone)
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