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Abusive tax shelters—complex transactions that produce tax benefits Congress never intended, but that may resemble legitimate business deals—frequently escape Internal Revenue Service (IRS) detection. For the past twenty years, the federal government has attempted to bolster the IRS’s ability to detect these transactions by requiring taxpayers and their advisors to disclose “reportable transactions” to the IRS Office of Tax Shelter Analysis. These mandatory disclosure rules can serve valuable tax enforcement functions, such as deterring abusive tax planning. However, these rules are also subject to significant limitations, especially when applied to high-income and wealthy taxpayers who have access to sophisticated legal counsel. In July 2021, the U.S. Supreme Court introduced an additional potential obstacle as a result of its decision in CIC Services, LLC v. Internal Revenue Service—the reportable transaction rules may now be subject to preemptive administrative law challenges without being barred by the Anti-Injunction Act. This Article argues that in the wake of CIC Services, policymakers should look beyond simply reforming the IRS’s process of issuing tax shelter notices to avoid potential administrative law challenges. Instead, they should reconsider more generally the government’s primary reliance on “activity-based rules” to combat abusive tax planning. This Article brings new perspective to the challenges of targeting tax shelters and explains how they result from the government’s activity-based approach. To complement this activity-based approach, this Article describes how the government should also incorporate an “actor-based” approach to combating abusive tax planning, which would adjust the tax compliance rules based on the economic circumstances of the taxpayers, rather than solely as a result of their activities. High-income and wealthy taxpayers could be subject to adjusted tax compliance rules, such as higher tax penalties, longer statutes of limitation, narrower penalty defenses, or additional information reporting obligations. This actor-based approach offers specific advantages following the decision in CIC Services and can be coordinated with the current reportable transaction rules to provide a more robust and comprehensive approach to combating abusive tax planning [ABSTRACT FROM AUTHOR]

Our study of 267 U.S. firms shows that improved environmental risk management is associated with a lower cost of capital. Our findings provide an alternative perspective on the environmental-economic performance relationship, which has been dominated by the view that improvements in economic performance stem from better resource utilization. Firms also benefit from improved environmental risk management through a reduction in their cost of equity capital, a shift from equity to debt financing, and higher tax benefits associated with the ability to add debt. These findings help build better theory regarding the outcomes of strategic improvements in environmental risk management. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper examines the differential tax treatment of the borrower and lender at the time debt is called as a potential explanation for the widespread existence of call provisions in corporate debt. This tax effect alone cannot explain the standard call feature because greater tax benefits may be derived for bonds callable at market prices. The equilibrium implications of the model allowing for tax arbitrage opportunities both at the corporate level and the individual level also are considered. [ABSTRACT FROM AUTHOR]

The main objective of this paper was to develop a simple valuation formula for the newly established safe harbor Tax Benefit Transfer lease. With the help of this formula, it was shown that tax benefits derived by the lessor depend in a complex way upon the price paid the lessee in purchasing those benefits. It was further shown how the lease should be priced to divide the overall benefit between the two parties based on any desirable sharing formula. The valuation formula was also used to demonstrate that the magnitude of the joint tax benefit--i.e., the loss of tax revenue to the Treasury--is affected by the way in which that benefit is divided, as well as by the choice of the term of the lease and the interest rate charged on the attached wash loan. A closing discussion provided the rationale for inclusion of the wash loan in the TBT lease valuation. [ABSTRACT FROM AUTHOR]

This article examines whether Part IVA of the Income Tax Assessment Act 1936 has been effective in preventing tax avoidance. It argues that the effective operation of the Part IVA antiavoidance test turns on whether it can catch a scheme which has been entered into for the dominant purpose of a tax benefit. Drawing on case studies, it concludes that Part IVA has been effective, owing to the use of a counterfactual in determining whether there was a reasonable alternative postulate for the scheme in question and the section 177D(2) multifactorial test to determine the purpose of the scheme. However, this article argues that increasingly sophisticated ways of avoiding tax necessitate extension of the dominant purpose test to include any scheme where there is a collateral purpose of a tax benefit, even where the scheme was entered into primarily for commercial benefit. [ABSTRACT FROM AUTHOR]

In this paper, we examine the impact of the economic crisis and the policy reaction on inequality and relative poverty in four European countries: France, Germany, Ireland and the UK. The period examined, 2008-13, was one of great economic turmoil, yet it is unclear whether changes in inequality and poverty rates over this time period were mainly driven by changes in market income distributions or by tax-benefit policy reforms. We disentangle these effects by producing counterfactual ('no reform') scenarios using tax-benefit microsimulation and representative household surveys for each country. For the first stage of the Great Recession, we find that the policy reaction contributed to stabilising or even decreasing inequality and relative poverty in the UK, France and, especially, Ireland. Market income changes nonetheless pushed up inequality and relative poverty in France. Relative poverty increased in Germany as a result of policy responses combined with market income changes. Subsequent policy reforms, in the later stage of the crisis, had markedly different cross-country effects, decreasing overall poverty in France, increasing it in Ireland, and giving mixed effects for different subgroups in Germany and the UK. [ABSTRACT FROM AUTHOR]

The Multinational Anti-Avoidance Law and the Diverted Profits Tax together constitute a significant step in Australia's effort to claim a larger slice of the multinational tax pie. This paper undertakes a close reading of each regime, and argues that (i) the DPT may be burdened with some key frailties, particularly in relation to its continued use of a 'tax benefit' concept, and (ii) the regimes do not sit entirely comfortably with Australia's treaty network. [ABSTRACT FROM AUTHOR]

The paper presents a large scale overlapping generation model with heterogeneous agents, where the household is the decision unit. We calibrate the model for three European countries - France, Italy and Sweden - which show marked differences in the design of some public programmes. We examine the properties in terms of annual and life cycle redistribution of a number of tax-benefit programmes, by studying the impact of removing from our model economies some or all of them. We find that whether one considers a life cycle or an annual horizon, and whether behavioural responses are accounted for or not, has a large impact on the results. The model may provide useful insights for policy makers on which kind of reforms are more likely to achieve specific equity objectives. [ABSTRACT FROM AUTHOR]

In-work support through the tax-benefit system has proved to be an effective way of increasing the labor supply of lone mothers and first earners in couples in a number of OECD countries. At the same time, these instruments usually create negative employment incentives for secondary earners. This in turn reduces the potential of in-work support to address the joint objectives of higher employment and lower poverty levels. In this paper, we present a simulation exercise to examine labor supply implications of a diverse set of possible reforms to the main elements of tax and benefit support for families with children. We set the analysis in the context of the Polish tax and benefit system and show how an adequate combination of increased generosity of support with the introduction of a "double earner" premium may result in an increased labor supply of first and second earners in couples. The simulated reactions are concentrated in the lower half of the income distribution, thus increasing the potential of in-work support to alleviate poverty. [ABSTRACT FROM AUTHOR]

The question of how horizontal equity between families in the tax-benefit-system is affected by the within-household distribution of earnings has not been systematically analyzed so far. Using an arithmetic model accounting for all relevant parts of the German tax-benefit-system we explored this aspect in detail. From our calculations it became evident that the combined burden of taxes, social security contributions, and transfers was significantly affected by the distribution of earnings between spouses and that the effect differs with respect to total household income. Overall, the German tax-benefit-system favors an unequal income distribution within the household. Applying the model on empirical data taken from the most recent German Income and Expenditure Survey, we were able to quantify these effects. According to our results, total disposable income of the households analyzed would increase by about €5.5 billion per year if all wage income within households would be allocated to a single-earner. [ABSTRACT FROM AUTHOR]

This article provides an overview of the recent PATH Act changes to the law governing how partnerships will be audited, which becomes effective for tax years beginning after December 31,2017. The article focuses on the effects of the law on private investment funds and their investors, and details the various ways that different approaches to implementation of the law are likely to affecf private investment funds and their investors. [ABSTRACT FROM AUTHOR]

The article focuses on an update on consultation requirements in relation to a Council Tax Reduction Scheme (CTRS), proposed by the Haringey London Borough Council of Haringey in London, England. Topics discussed include the abolition of council tax benefit (CTB), solution to the reduction in central government funding, and consultation response of Reverend Paul Nicolson.

If a taxpayer borrows money, the borrowed funds are not included in the taxpayer's gross income. That treatment is proper even though the taxpayer has increased his assets by the amount he borrowed because he also has created a corresponding liability to pay back the loan. The taxpayer's net wealth has not increased. The more difficult and interesting questions arise when the taxpayer fails to repay the loan. At first blush, it would appear that upon cancellation of a loan, the taxpayer should have income for the amount that was cancelled. However, the current tax treatment is not that simple. A number of exceptions exist to the straightforward treatment under which the cancellation requires the taxpayer to recognize income. Some of those exceptions reflect an application of normal tax principles while others exist for programmatic purposes. Those exceptions make the tax treatment of cancellation of debt particularly complex. The goal of this Article is to set out the tax treatment of cancellation of debt, including the many exceptions that apply. It first reviews the history of the cancellation of debt rules, which helps explain how we arrived at the current treatment. It then covers the current statutory treatment of cancellation of debt as well as the many common law rules (such as the transactional approach and the tax benefit rule) that apply. [ABSTRACT FROM AUTHOR]

The article focuses on the regulations on financing public benefit activities from tax designation in Poland. Topics discussed include the Act on Public Benefit Activity and Volunteerism of April 24, 2003, the criteria to become the public benefit organizations (PBOs), and the mechanism of financing public benefit activities.

The author reflects on the evolution of government submissions on proposals for tax legislative proposals of the American Bar Association (ABA) Section of Taxation. Topics discussed include impact of government recommendations on tax legislatives as well as on tax benefit rule, importance of amendments in tax policy, and the laws related to legal drafting.

The purpose of this article is to evaluate whether the tax benefits defined by public policies to encourage technological innovation, highlighting the Fiscal Incentives Act (Good of Law), are contributing appropriately to stimulate technological innovation in Brazilian companies, with emphasis in the industrial market-oriented external. This study will be based on the evaluation of the consistency of the Law of Technological Innovation - LIT (Federal Law. 10,973, of 02.12.2004), and in particular, the Fiscal Incentives Act (Federal Law. 11.196/2005 or Good Law). The study is supported by the theory of innovation as well as the Laws of Innovation and incentives. Analysis of the studies, reports and documents showed that public policies to encourage technological innovation in companies has a strategic role as stimulate productive agents who need to make crucial decisions how to innovate in an environment full of uncertainties about the consequences of their future decisions. In turn, it became clear that this requires that public policy innovation act as effective instruments to encourage businesses in the area ofinnovation, in order to make them more competitive. We conclude that the Fiscal Incentives Act - although still restricted to business income, ie, mostly the large ones - can be framed within a modern conception of tax incentives. Thus, in spite of the difficulties and shortcomings in its implementation, the Fiscal Incentives Act presents itself as an important instrument to stimulate domestic companies, through tax incentives, innovation in Brazil. [ABSTRACT FROM AUTHOR]

The IRS is increasingly scrutinizing conservation contribution deductions. Although a contribution of a conservation easement provides an excellent public benefit, and the bonus of a tax break for the contributor, the contributor will lose that tax benefit if the contribution does not satisfy the technical requirements in the Code and regulations. This article reviews those requirements and discusses recent case law that considers the IRS's application of the rules to various types of contributors. [ABSTRACT FROM AUTHOR]

Australia's current general anti-avoidance rule, which defines tax avoidance as a scheme entered into with the dominant purpose of obtaining a tax benefit, has been criticised for creating too much taxpayer uncertainty, with the main object of such criticism being the test to determine the taxpayer's dominant purpose. To determine whether the taxpayer has such a dominant purpose, in principle the courts and the Commissioner of Taxation consider eight specific factors, although how much consideration is to be given to each factor is left to the court's determination. Based on a sample of 95 cases, this paper uses logistic regression to infer the direction and impact of these factors, as well as additional issues such as whether the scheme resulted in a tax benefit, on the probability of an outcome favouring the Commissioner. The suggestive inferences should be extremely useful to litigants within Australia's taxation system and in those jurisdictions considering implementing a general anti-avoidance rule. The inferences also cast a spotlight on deficiencies within Australia's current general anti-avoidance rule. These deficiencies raise various policy issues including whether Part IVA is operating as intended, whether it is helping to create a more equitable tax system, and whether the government or the judiciary controls the boundaries of tax avoidance. The inferences also raise issues with respect to the administration of tax avoidance under the cooperative compliance model. In addition, the inferences highlight issues with the use of specific anti-avoidance rules instead of, or in concert with, a general anti-avoidance rule. These policy issues are discussed. [ABSTRACT FROM AUTHOR]

Although no one can predict what Congress will do at any point, it is quite likely we will see higher income tax rates in the near future, along with an increase in federal estate tax rates and a decrease in available income tax deductions. For high net worth investors, private placement insurance contracts could be the solution to tax planning in an unfriendly tax environment. These investment vehicles allow for investment customization and provide for the possibility of stronger and more consistent investment performance, while also offering attractive tax benefits. The author explains several options within the realm of private placement insurance, and analyzes the related investment and tax planning issues. [ABSTRACT FROM AUTHOR]

This paper explores the effects of tax and benefit systems on differences in income and incentives to earn income within couples in nine member countries of the European Union. The comparative perspective allows us to establish the relative effects of different policy regimes, given the characteristics of each national population, using a consistent approach and set of incidence assumptions across countries. We find variation in the extent of within-couple equalizing across countries and depending on whether the man or the woman has the larger market income. We find no evidence of tax-benefit systems reducing income differences at the expense of increasing disparities in work incentives within couples. [ABSTRACT FROM AUTHOR]

The authors suggest a new comprehensive measure of support given through tax benefit systems to families with children. Using microsimulation techniques, this accounts for all provisions contingent on the presence of children, while usually only gross child/family benefits are considered. The authors use EUROMOD, the European Union tax-benefit microsimulation model, to quantify the support for children and analyze its impact on household incomes and child poverty for 19 countries. The authors find that the conventional approach underestimates on average the total amount of support for children by about one fifth. Furthermore, the differences between two measures vary considerably across countries and are, therefore, critical for cross-national comparisons. [ABSTRACT FROM AUTHOR]

The article discusses the issues surrounding the impact of the enactment of the American Jobs Creation Act of 2004 (AJCA) in the U.S. It states that the new legislation created by the Congress to address the corporations' abuse of the tax deduction system through AJCA has created new problems. It suggests that the problem can be eliminated by implementing minor fixes to the system or through the creation of a simple third party organization.

This article analyses the theoretical and applied aspects of employment disincentives for second earners that exist in the British tax benefit system. The shortcomings of existing tax-benefit income profiles are examined, together with the underlying role of tax credits in disincentives compared with other factors. The potential of such disincentives to worsen employment of second earners in a recession is addressed. Conclusions suggest that a more sophisticated applied approach is required by social policy analysts, together with improved ways to profile incentives in the tax benefit system. [ABSTRACT FROM AUTHOR]

Double tax conventions (DTCs) generally include clauses that refuse to residents of a contracting state the right to claim treaty benefits with respect to income derived from the other contracting state if they are not 'beneficial owners' of the income. 'Limitation-on-Benefits' (LOB) clauses in DTCs, particularly where the United States is a contracting state, provide objective criteria for limiting taxpayer rights under DTCs. LOB clauses, which are designed to prevent treaty abuse, may, however, be in violation of the Treaty Establishing the European Community (EC Treaty) freedoms. This article explores the issue of the compatibility of LOB with EC freedoms of establishment and movement of capital. [ABSTRACT FROM AUTHOR]

The article explores the Artist-Museum Partnership Act, which allows artists to take the same fair market tax deduction on charitable gifts of their own art, and the opening of new markets for charitable giving in the U.S. It discusses the charitable giving as it applies to art, the history of the Artist-Museum Partnership Act, and the statutory provisions of the Act. Furthermore, it investigates the relation between charitable giving, institutional museum, practice of deaccession, and moral rights of an artist and the effect of the Act on giving generally.

Corporations in the developed world increasingly see India as a high-growth market and its companies as acquirers of their assets, global competitors, partners for enhancing the competitiveness of their global value chain and a source of new energy and dreams for the world economy. How did this all happen? Nirmalya Kumar shares the essence of what he learned from 10 trips to India to interview more than 30 CEOs and top executives who are unleashing the new global power of Indian firms. [ABSTRACT FROM AUTHOR]

"Unwinding" is a common, if not ubiquitous, feature of tax practice. In a successful unwind, parties to a prior transaction or arrangement back out of it by means of a later transaction and are treated for tax purposes as having engaged in no transactions at all. In a failed unwind, the parties undertake the later transaction, but it is not treated as nullifying the effects of the first transaction; rather, two separate transactions are deemed to have taken place, each with its own tax consequences. This Article develops the first unified theoretical framework for analyzing tax unwinding. It also provides an organizing principle applicable to other kinds of corrective action that individuals or the government may undertake in the income tax context. These types include equitable recoupment, the tax benefit rule, and the claim of right doctrine. Each involves resolution of a different kind of excusable inconsistency in taxpayer or, sometimes, government conduct. In the case of unwinding, the inconsistency arises between the taxpayer's understanding of the circumstances in which she acts and the circumstances as they actually are; it concerns the possible efficacy of a chosen action to realize an end the taxpayer seeks to achieve. In some such cases, unwinding relief may be appropriate, but it is usually appropriate only where the relevant taxes are themselves transactionally based. In the non-transactional tax context, more stringent requirements apply to the nature of the taxpayer's error, and administrative considerations militate against an expansive unwinding doctrine. [ABSTRACT FROM AUTHOR]

The article provides analysis on the judgment of the federal Court on the case of Star City Pty Ltd., in Great Britain. Court Commissioner describes the case as one of rare and most challenging legal assessment that the court has been made in 2007. It cites that the Star City's case decision did not constitute in standard for the interpretation of Pt IVA. In fact, the court conducts several objective tests in the deliberations to define whether it would be fair to judge that the taxpayer engage in the scheme with prevalent purpose of achieving tax benefits. The court's decision in the case shows that the "commercial reality" of the bargaining process used by the company did not necessarily mean that the taxpayer did venture into alternative action to obtain tax benefit.

The paper focuses on activation bias of current social policies and its relation to alleviation of poverty and social exclusion. Activation is viewed as a policy paradigm that changes relationship between the welfare state and individuals. Author distinguishes between narrow and broader understandings of the activation approach. In the broader sense, the activation aims at raising opportunities to fully-fledged social participation in all domains of society. In the narrow sense, the activation is only related to labour market participation and decreasing of unemployment. Author analyses three forms of activation that are important in order to reduce poverty and social exclusion: workfare strategies embodied in the social assistance systems, changes of key parameters of tax-benefit systems, and last but not least active labour market policies. Author pays attention to their potential to activate poor people and their consequences both for target groups and social policy. The focus is also on political discourses and assumptions which determine implementation of these programmes. Finally, the paper deals with activation potential of Slovak social policy and suggests some principles how to evaluate it. [ABSTRACT FROM AUTHOR]

Among the requirements a pension plan must meet to qualify for tax benefits are the nondiscrimination rules. Nondiscrimination rules are designed to ensure that pension benefits do not disproportionately accrue to highly compensated employees. But the rules are also complex and increase administrative and compliance costs associated with offering a pension plan. Recent pension reform proposals would simplify nondiscrimination rules, reducing administrative and compliance costs and potentially leading to more employers offering pension benefits. However, there are concerns that any loosening of the rules could lead to a drop in participation by low-wage workers. This paper examines the economic incentive that nondiscrimination rules provide to employers to cross subsidize employees; that is, the incentive to increase pension benefits (and total compensation) paid to low-paid workers for the express purpose of enabling high-paid workers to receive a higher proportion of compensation in the form of pension benefits. The study calculates the incentives faced by a hypothetical firm, and then illustrates how those incentives change when assumptions about employee contribution behavior, employee compensation, and employer-matching formulas are allowed to vary. Results show that only firms with a relatively low ratio of low-paid workers to high-paid workers would have an economic incentive under a standard 401(k) plan to cross subsidize employees. Although this incentive may exist in a large number of firms, these firms likely employ only a small portion of the workforce. This is ultimately an empirical question, however, and examining data on the distribution of earnings within pension plans, as well as determining if firms find nondiscrimination rules binding, would be a useful extension of this research. [ABSTRACT FROM AUTHOR]

Today's equipment leasing market is highly competitive. If you've got a solid leasing strategy, it's a buyer's market. But the challenge for most companies is in leasing small-ticket equipment. It can be very costly. The author explains how to effectively manage those costs. © 2006 Wiley Periodicals, Inc. [ABSTRACT FROM AUTHOR]

This paper analyses the tax income consequences for the government of creating a tax reduction system based on investments. This type of policy is usually applied with a view to improving the general conditions of the economy, or as a model of investment for the future, but the net effect on tax collection for the government depends on the performance of businesses benefiting from the deductions. This investigation used economic, mathematical, statistical and dynamic tools to describe the optimization problems for businesses and the government (related to fiscal problems) within a neo-classical framework. The practical application is related to Colombia, and uses a calibration of the author's proposed variables. The paper concludes that it is convenient to apply this instrument, given the need to accelerate economic growth and solve a difficult fiscal situation at the same time. Furthermore, it establishes that tax benefits are unlikely to generate excessive levels of investment that would reduce tax collection at current values. However, measures may need to be introduced to control how benefits are granted and avoid opportunistic behavior. [ABSTRACT FROM AUTHOR]

This paper analyzes how inflation-induced erosions of nominally defined amounts built into relevant tax rules (“bracket creep”) alter distributional and revenue-generating properties of income taxes and social insurance contributions. Using a multi-country tax-benefit model, it provides quantitative estimates for Germany, the Netherlands and the U.K. In the absence of automatic inflation adjustment mechanisms, effects on individual tax burdens can be substantial, even with low inflation. Bracket creep is found to reduce tax progressivity. At the same time, overall tax revenues increase. In terms of tax systems’ equalizing capacities, which depend on both these factors, the second effect dominates: if tax systems were left unadjusted then inflation would lead to lower and slightly more equally distributed household incomes. However, existing inflation adjustment regimes in the Netherlands and the U.K. successfully prevent large tax burdens changes. [ABSTRACT FROM AUTHOR]

Presents information on the decision of the Australian High Court regarding a split loan facility. Overview of the two portions of a split loan; Factors used in determining the scheme of a split loan; Identification of the tax benefit.

Tax benefits have been the key in making vacation homes affordable for many taxpayers. In some cases these benefits have been augmented by an inconsistency in allocation methods used to determine allowable expenses for vacation homes under Section 280A. The U.S. Tax Court created this inconsistency years ago with its decision in Bolton, 77 TC 104 (1981), where the Court approved an allocation method that was contrary to IRS guidance. Although most analyses since this decision have focused on how the Bolton decision permits a taxpayer to increase total deductions related to a rental property when the Section 280A limits apply, there is another aspect to the allocation controversy that has not received as much attention. Specifically, the possible loss of the personal deduction for residential interest when the property does not qualify as a second home may create unexpected tax consequences, where the best tax-planning advice may be to encourage the taxpayer to use the vacation home for more personal days. This article provides a brief review of the basic Sec. 280A rules for vacation rental homes and closely examines the tax effects of conflicting statutory, administrative, and judicial guidance on the treatment of interest and taxes related to such a property. As demonstrated by three scenarios, the inconsistent treatments may provide an opportunity for owners of vacation homes to "game" the system for maximum tax benefit near the end of a lax year. As a consequence of Congress's failure to update Sec. 280A following the 1986 changes on interest deductions, such gaming of the system may be accomplished without confronting change of accounting method issues. [ABSTRACT FROM AUTHOR]

Recently skyrocketing real estate prices have caused taxpayers to intensify their efforts to utilize the tax deferral benefits of Internal Revenue Code §1031 to put their newly found tax-free dollars of equity to work to accomplish a variety of business and investment objectives. Goals can range from tax benefits such as creating or increasing depreciation deductions by exchanging into more highly leveraged property to economic benefits such as tax- free diversification or consolidation of investment properties. Of increasing interest is the use of tax-deferred exchange dollars to build or improve property to suit the specific needs of the taxpayer rather than acquiring existing property that might not be as suitable. Although taxpayers have experimented with these so-called "build-to-suit" exchanges since the tax Court sanctioned the prototype transaction in its 1962 Baird v. Commissioner decision, subsequent statutory and administrative pronouncements have refined the technique and provided more certainty for structuring a variety of transactions. This article examines the legislative, judicial, and administrative history of build-to-suit tax- deferred exchanges, and suggests ways to structure transactions in a variety of business and investment scenarios. [ABSTRACT FROM AUTHOR]

The way in which a scheme is defined under Part IV A is emerging as the principal factor which circumscribes the purpose of the scheme. Context is critical to this inquiry. If the identified tax benefit is not referenced to its practical context, then the inquiry regarding whether obtaining the tax benefit is the dominate purpose is largely a forgone conclusion. This essay examines the principles which have been established to date and argues for the need to determine dominate purpose by reference to the practical context of the transaction, in order to ensure that the general anti-avoidance measure does not annihilate all tax benefits. [ABSTRACT FROM AUTHOR]

The article discusses the risk posed by land trusts in opening space availability and the demand in rendering public access in the U.S. It states that land trust gained a significant public subsidy in terms of tax benefits, however, the benefits are not immediately given beyond conservation. It notes that land trust activities vary in their focus and scope, wherein some are committed only to one piece of land while the other pursue a much larger land protection agenda.