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Abstract

This article reviews the IRS and court usage of the substance over form doctrine to determine its role in the federal tax system. The specific issue addressed is whether the doctrine is the cornerstone of the federal tax system or merely another lethal weapon in the IRS's arsenal. To accomplish this objective, the article focuses on the doctrine's development in Supreme Court cases, and describes the primary ancillary tax principles applied to create and shape the doctrine: arm's-length versus self-dealing, business purpose versus tax avoidance, and step versus independent transaction treatment of a series of interrelated transactions. The issue of whether form or substance generally prevails, and the right of the taxpayer to invoke the doctrine are also addressed.

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Tax Law Commons

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