Document Type

Article

Publication Date

2025

Abstract

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah suggests that courts should adopt a consequentialist approach to tax shelter litigation that would acknowledge the long- term risks of enabling tax shelters and seek to prevent their recurrence. In his excellent article on Gregory v. Helvering, David Elkins says that the common assumption that the case was about abuse of the tax-free reorganization provisions of the code is mistaken. Therefore, he argues, both Judge Learned Hand and the Supreme Court were wrong when they focused on whether the transaction was a “reorganization” as intended by Congress. Instead, they should have focused on whether what Mrs. Gregory achieved was just the most tax- efficient choice among several alternatives and was based on problems with the underlying statute and regulations, rather than on abusive tax avoidance.

Comments

Reprinted with the permission of Tax Analysts

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