Questions and difficult decisions remain as the government works diligently on high-profile guidance on the rescission doctrine, a senior Treasury official said March 30.
The doctrine generally says transactions can be disregarded for federal income tax purposes if the parties return to the status quo in the same tax year. The issue is of key interest to many in the tax community as companies continue to struggle in tough economic times.
Lee Kelley, senior counsel with the Treasury Office of Tax Policy, said there are different views on how much tax planning should be allowed in terms of the rescission doctrine, with some concern in the government about “hindsight” tax planning.
“That question is one where there are some differences,” Kelley said at a corporate taxation conference sponsored by the American Law Institute and the American Bar Association Tax Section.