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whether the restructuring of petitioner's EVC activity in 1984 by
inserting NUF and OPL as part of the EVC transactions had
substance. If these transactions lack substance, then petitioner
engaged in an anticipatory assignment of income and cannot avoid
taxation "no matter how clever or subtle" the arrangement.
United States v. Basye, 410 U.S. at 450. While a taxpayer may
structure a transaction to minimize tax liability, that
transaction must have economic substance if it is to be respected
for tax purposes. See Kirchman v. Commissioner, 862 F.2d 1486
(11th Cir. 1989), affg. Glass v. Commissioner, 87 T.C. 1087
(1986).
The inquiry into whether transactions have sufficient
substance to be respected for tax purposes turns on both the
objective economic substance of the transactions and the
subjective business motivation behind them. See Kirchman v.
Commissioner, supra at 1491-1492;29 see also ACM Partnership v.
29In Kirchman v. Commissioner, 862 F.2d 1486, 1492 (11th
Cir. 1989), affg. Glass v. Commissioner, 87 T.C. 1087 (1986), the
court observed:
Courts have recognized two basic types of sham
transactions. Shams in fact are transactions that
never occur. In such shams, taxpayers claim deductions
for transactions that have been created on paper but
which never took place. Shams in substance are
transactions that actually occurred but which lack the
substance their form represents. * * *
Because all the transactions at issue in this case actually
(continued...)
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