Government Decides Against Further Review in Washington Mutual

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June 2, 2011

As we previously reported, the Ninth Circuit in Washington Mutual reversed the district court and ruled that the taxpayer did have basis in regulatory rights that it received in connection with a transaction in which it took over failed thrifts during the savings-and-loan crisis of the 1980s.  The government has now allowed the periods for seeking rehearing and certiorari to expire without taking action.  The Ninth Circuit’s decision is therefore final, and the case will move on to further proceedings on remand in the district court to determine the amount of basis.… Read More

The Ninth Circuit Rejects the Government’s Effort to Disregard “Economic Realities” in Washington Mutual

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April 8, 2011

[Note:  Miller & Chevalier is counsel to Washington Mutual in this case.]

In the past decade, the government has often defeated taxpayer claims that tax benefits flowed from certain transactions on the grounds that the economic substance of the transactions did not justify the tax benefits and that the taxpayer’s contrary arguments reflect a hypertechnical reading of the rules.  In Washington Mutual Inc. v. United States (9th Cir. No. 09-36109), the proverbial shoe was on the other foot.  A key element of the taxpayer’s business transaction was the receipt of regulatory rights in exchange for incurring the cost of relieving … Read More