In Blow To IRS, Court Says $4B Utility Deal Advance Is Debt

Law360, New York (June 22, 2012, 7:32 PM EDT) -- The U.S. Tax Court on Tuesday ruled that Scottish Power did not misclassify a $4 billion cash advance to a subsidiary to cut its federal tax bill, dealing a blow to the Internal Revenue Service's efforts to crack down on advantageous tax structures in cross-border acquisitions.

In addition to letting Scottish Power off the hook for a $188 million tax bill, the decision is a big win for foreign companies seeking to maximize tax perks when buying American assets — particularly those using so-called “double dip”...
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