Reexamining Black & Decker's Contingent Liability Tax Shelter

Posted: 19 Aug 2005

See all articles by Ethan Yale

Ethan Yale

University of Virginia School of Law


In this article, Professor Yale reviews the contingent liability tax shelter employed by Black & Decker, and critiques the arguments the government has made in its appeal to the Fourth Circuit. He concludes that the government's technical arguments are unpersuasive and demonstrates that if the Fourth Circuit accepts them, it might result in unintended consequences in run-of-the-mill transactions. Yale suggests a different strategy the government should pursue when challenging contingent liability tax shelters, a strategy that would prevent taxpayers from enjoying an undeserved tax windfall in abusive cases without distorting the language of the code.

Keywords: tax, tax shelter, corporate tax

JEL Classification: K39

Suggested Citation

Yale, Ethan, Reexamining Black & Decker's Contingent Liability Tax Shelter. Tax Notes, Vol. 108, p. 223, July 11, 2005, Georgetown Law and Economics Research Paper No. 785825, Available at SSRN:

Ethan Yale (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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