The Fifth Circuit Gets it Wrong in Compaq V. Commissioner

Posted: 24 Jan 2002

See all articles by Daniel Shaviro

Daniel Shaviro

New York University School of Law

David A. Weisbach

University of Chicago - Law School; Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP)

Abstract

This report argues that the recent decision of the Fifth Circuit in Compaq v. Commissioner is seriously misguided and may have adverse consequences for the tax system if not reversed either by the Supreme Court or legislatively. In particular, it criticizes the Fifth Circuit's discussion of the pre-tax profit and business purpose requirements, and argues that these requirements should be interpreted in light of the purpose that antiabuse doctrines serve, which is to filter out tax arbitrage transactions that appear likely to be socially undesirable.

Suggested Citation

Shaviro, Daniel and Weisbach, David, The Fifth Circuit Gets it Wrong in Compaq V. Commissioner. Tax Notes, Vol. 94, No. 4, January 28, 2002. Available at SSRN: https://ssrn.com/abstract=298277

Daniel Shaviro (Contact Author)

New York University School of Law ( email )

40 Washington Square South
Room 314-B
New York, NY 10012-1099
United States
212-998-6187 (Phone)
212-995-4341 (Fax)

David Weisbach

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-3342 (Phone)
773-702-0730 (Fax)

Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP) ( email )

5735 S. Ellis Street
Chicago, IL 60637
United States

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