Black & Decker's Contingent Liability Shelter: 'A Thing of Grace and Beauty'?
15 Pages Posted: 28 Jan 2005 Last revised: 12 Sep 2015
The recent district court decision in Black & Decker v. United States has been heralded as a major setback for the government's litigation of contingent liability shelters, Burke says. This article seeks to explain what happened in Black & Decker based on a close reading of the parties' briefs and other publicly available documents. A fuller understanding of the case, she argues, suggests that the district court's October summary judgment for the taxpayer should be reversed by the Fourth Circuit on appeal, and that the government has persuasive statutory arguments that have yet to be decided on the merits. The Black & Decker decision, says Burke, also sheds light on the challenges faced by generalist district courts in attempting to deal with tax shelter transactions that are purposefully designed to exploit ambiguous statutory language.
Keywords: Black & Decker, economic substance, liabilities, contingent, tax shelter, statutory interpretation, literalism
JEL Classification: K34
Suggested Citation: Suggested Citation