Back to the Future with Rescission Decisions: Impact of IRS Decision to Issue No New Guidance

Posted: 24 Jan 2014

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: January 22, 2014

Abstract

The rescission doctrine, governing when parties can unwind a transaction with retroactive tax effect, has more than its share of ambiguities. When the Internal Revenue Service announced in 2012 that it was contemplating providing further guidance on rescission, the reaction of tax practitioners was positive. The Service has now announced, however, that no new guidance will be forthcoming and that it will not issue private letter rulings on rescission. This article considers where that announcement leaves the doctrine, with a 1980 revenue ruling now apparently representing the Service’s only real guidance on rescission.

Keywords: Rescission, Unwinding, Tax Avoidance, Revenue Ruling 80-58, Penn v. Robertson, Status Quo Ante

JEL Classification: K43

Suggested Citation

Jensen, Erik M., Back to the Future with Rescission Decisions: Impact of IRS Decision to Issue No New Guidance (January 22, 2014). Journal Taxation of Investments, Winter 2014, at 21; Case Legal Studies Research Paper No. 2014-03. Available at SSRN: https://ssrn.com/abstract=2383326

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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