Number: RS22846
Title: The Economic Substance Doctrine: Legal Analysis of Proposed Legislation
Authors: Carol A. Pettit, American Law Division 
Abstract: The economic substance doctrine was judicially developed. A number of bills introduced in the 110th Congress would codify the definition of "economic substance," provide a strict liability penalty for underpayments resulting from disallowed transactions that lack economic substance, and prohibit deduction of interest on those underpayments. The proposals would not codify the doctrine, itself, nor provide standards for a court's determination that the doctrine was relevant to a particular case. Codification has been dubbed a "revenue raiser," though there is disagreement as to both the amount that would be raised and the way in which codification would increase revenue.
Pages: 6
Date: March 24, 2008