IRS amplifies in its newly released Notice 2014-58 the definition of “transaction” as codified under section 7701(o) for the purpose of determining when the economic substance doctrine applies, and clarifies the meaning of “similar rule of law” under section 6662(b)(6) for the purpose of accuracy-related penalty. Jasper L. Cummings, Jr. of Alston & Bird LLP commented that this notice was “very curious” because it did nothing but general knowledge. Monte A. Jackel pointed that more clarification is in needed despite the guiding function of the notice.
See Tax Analysts Velarde, Andrew, “IRS Releases Economic Substance Doctrine Guidance,” 2014 TNT 197-1 (October 09, 2014).
Also see IRS Notice 2014-58.
Posted by Jiaqi Wang, Associate Editor, Wealth Strategies Journal