Opening Briefs Filed in Rodriguez

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November 21, 2012

The parties have now filed their opening briefs in the Fifth Circuit in Rodriguez, an appeal from the Tax Court’s decision that section 951 inclusion income is not to be taxed at the lower rate applicable to qualified dividends.  See our prior report here.

As they argued in the Tax Court, the taxpayers emphasize a policy argument, stating that “Subpart F’s general purpose and mechanics should govern” and “Subpart F treats the amount included in the U.S. shareholder’s gross income essentially like a dividend.”  The taxpayer also invokes substance vs. form principles and statements in the legislative history … Read More

Cadrecha Appeal to Be Dismissed Following Settlement Agreement

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November 1, 2012

We have previously reported on the taxpayers’ appeal in Cadrecha from an application of the statute of limitations that the Court of Federal Claims acknowledged as “harsh,” but found to be required by law.  The taxpayers’ brief emphasized the unfairness of the result, and it struck a chord with the Department of Justice, whose appellate lawyers concluded that the taxpayers ought to get a break — either because they deserved one or perhaps because DOJ feared that the facts were so sympathetic that they created a risk of an adverse Federal Circuit decision that would cause mischief down the road.… Read More