5th Circ. Backs IRS' Denial Of $18M Loss In Tax Shelter Row

Law360, Houston (June 25, 2013, 7:28 PM EDT) -- The Fifth Circuit said Monday that the Internal Revenue Service properly disallowed an $18 million tax deductible loss a businessman claimed he sustained on investments offered by Bricolage Capital LLC because the loss resulted from an abusive tax shelter.

Affirming a district court’s ruling in favor of the IRS, the federal appeals court ruled that James Kelley Williams’ investment in a tiered corporate vehicle designed to generate large losses through foreign currency exchange trades lacked “economic substance.”

“None of those key transactions had economic substance because...
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