Law360 quoted partner Thomas Linguanti in an article about a case before the US Tax Court that will address a provision governing the relevance of the economic substance doctrine in a microcaptive insurance case.
Tom noted that while concerns about the IRS’s use of the doctrine have been publicly raised in transfer pricing cases, the suit in question demonstrates that the agency’s scrutiny of transactions for economic substance goes beyond international tax transactions.
“It’s now become an almost automatic area of inquiry by the IRS. It’s crossing all sorts of lines that we hadn’t seen crossed before,” Tom said.