A federal court in Baton Rouge, La., on Monday rejected two tax shelter transactions entered into by Dow Chemical that purported to create approximately $1 billion in phony tax deductions. In addition to rejecting the tax benefits from the shelter transactions, Chief Judge Brian A. Jackson also imposed penalties.
The schemes were allegedly created by Goldman Sachs and the law firm of King & Spalding, according to prosecutors, and involved creating a partnership that Dow operated out of its European headquarters in Switzerland. The case dates back to transactions Dow started in 1993 that involved patent transfers to company subsidiaries.
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