The Fifth Circuit Gets it Wrong in Compaq V. Commissioner
Posted: 24 Jan 2002
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: Suggested Citation