- 15 -
v. United States, supra at 583-584; Winn-Dixie Stores, Inc. v.
Commissioner, 254 F.3d 1313, 1316 (11th Cir. 2001), affg. 113
T.C. 254 (1999); UPS of Am., Inc. v. Commissioner, 254 F.3d 1014,
1018-1020 (11th Cir. 2001), revg. T.C. Memo. 1999-268; ACM Pship.
v. Commissioner, 157 F.3d 231, 247 (3d Cir. 1998), affg. in part,
revg. in part, dismissing in part, and remanding T.C. Memo. 1997-
115.
Our inquiry as to whether a transaction has sufficient
economic substance to be recognized for Federal income tax
purposes turns on the subjective business purpose and on the
objective economic substance of the transaction. Kirchman v.
Commissioner, 862 F.2d 1486, 1490-1492 (11th Cir. 1989), affg.
Glass v. Commissioner, 87 T.C. 1087 (1986).
In UPS of Am., Inc. v. Commissioner, T.C. Memo. 1999-268, we
held that the restructure of certain insurance premiums lacked
business purpose and economic substance and should be disregarded
for Federal income tax purposes. On appeal, the Court of Appeals
for the Eleventh Circuit reversed. UPS of Am., Inc. v.
Commissioner, 254 F.3d 1014 (11th Cir. 2001). In the context of
an ongoing, viable business, the Court of Appeals articulated
“business purpose” broadly, as follows:
a transaction has a “business purpose,” when we are
talking about a going concern like UPS, as long as it
figures in a bona fide, profit-seeking business. * * *
[Id. at 1019.]
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011