Daily Tax Update - February 20, 2007

SUPREME COURT DENIES CERT IN COLTEC AND DOW: Today, the Supreme Court of the United States denied the taxpayer’s petition for a writ of certiorari in both Coltec Industries, Inc. v. United States, 454 F.3d 1340 (Fed. Cir. 7/12/06) and Dow Chemical v. United States, 435 F.3d (6th Cir. 1/23/06). Many speculated that the cert petitions in these two cases gave the Supreme Court an opportunity to clarify the economic substance doctrine and resolve apparent differences in the doctrine’s application among circuits. Recent legislative efforts have also sought to codify the economic substance doctrine and establish a uniform standard. It is unclear whether and to what extent the Supreme Court’s denials of cert today will affect those legislative efforts.

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