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IRS Accuses Tax Court Of Ignoring Economic Substance

By Alex M. Parker · June 8, 2018, 8:35 PM EDT

The U.S. Tax Court ignored economic substance and legislative intent in a ruling that overturned a long-standing Internal Revenue Service position that sales of a U.S. trade or business by a foreign partner are taxable, according to an appeal the agency filed with the D.C. Circuit Friday.

The IRS appealed a 2017 decision by Tax Court Judge David Gustafson that found the agency's position was not supported by U.S. tax laws and let Grecian Magnesite Mining, Industrial Shipping Co. SA off the hook for tax liability...

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