Black & Decker's Contingent Liability Shelter: 'A Thing of Grace and Beauty'?

15 Pages Posted: 28 Jan 2005 Last revised: 12 Sep 2015

See all articles by Karen C. Burke

Karen C. Burke

University of Florida Levin College of Law


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

Burke, Karen C., Black & Decker's Contingent Liability Shelter: 'A Thing of Grace and Beauty'?. Tax Notes, Vol. 106, No. 5, January 31, 2005, San Diego Legal Studies No. 08-047, Available at SSRN:

Karen C. Burke (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics