2023-04-19
Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is from Young v. Commr., 923 F.2d 719 (9th Cir. 1991). The 9th Circuit affirmed the Tax Court’s determination that a special allocation of 75% of losses to a partner who “really held a 10% equity position” lacked economic substance. Discussing the taxpayer’s argument that the allocation had a business purpose, the court stated:
Bargaining for tax benefits does not establish a business purpose.