CCH Quotes Mark Allison: Seventh Circuit Upholds Valuation Misstatement Penalty
Mark D. Allison was quoted by CCH Federal Tax Weekly regarding the decision of the Seventh Circuit Court of Appeals to uphold the disallowance of losses from a distressed asset/debt transaction and the imposition of a 40% gross valuation misstatement penalty. The Seventh Circuit agreed with the majority of circuit courts in holding that a valuation misstatement penalty would apply in cases where the underlying transaction lacked economic substance. For the complete article, please visit CCH's website (subscription required).
Excerpt taken from the article.
"The Seventh Circuit cast its vote and joined the majority of the other courts of appeals in applying the 40 percent basis overstatement penalty to transactions lacking economic substance. Such a decision will undoubtedly be acknowledged by the Supreme Court as it takes up the same question in the Woods case and seeks to end the circuit split debate on the appropriate utility of such a penalty in the world of tax shelters," Mark Allison, Caplin & Drysdale, Chartered, New York, told CCH.
- Senior Counsel