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Corporate Shams

New York University Law Review, Vol. 87, 2012
2012
  • 0
    Citations
  • 9,279
    Usage
  • 11
    Captures
  • 1
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Usage
    9,279
    • Abstract Views
      8,041
    • Downloads
      1,238
  • Captures
    11
    • Readers
      7
      • SSRN
        7
    • Exports-Saves
      4
      • SSRN
        4
  • Mentions
    1
    • News Mentions
      1
      • News
        1
  • Ratings
    • Download Rank
      33,771

Most Recent News

FIRST EMPIRICAL STUDY OF U.S. SUPREME COURT CASES INVOLVING ALLEGATIONS OF CORPORATE TAX ABUSE DEVELOPED BY USC-NYU LAW TEAM

The following information was released by the University of Southern California: Professors at USC Gould School of Law and New York University School of Law

Paper Description

Many people — perhaps most — want to make money and lower their taxes, but few want to unabashedly break the law. These twin desires have led to a range of strategies, such as the use of “paper corporations” and offshore tax havens, that produce sizable profits with minimal costs. The most successful and ingenious plans do not involve shady deals with corrupt third parties, but strictly adhere to the letter of the law. Yet the technically legal nature of the schemes has not deterred government lawyers from challenging them in court as “nothing more than good old-fashioned fraud.” In this Article, we focus on government challenges to corporate financial plans — often labeled “corporate shams” — in an effort to understand how and why courts draw the line between legal and fraudulent behavior. The scholars and commentators who have investigated this question nearly all agree: Judicial decision making in this area of the law is erratic and unpredictable. We build on the extant literature with the help of a new, large dataset, and uncover important and heretofore unobserved trends. We find that courts have not produced a confusing morass of outcomes (as some have argued), but instead have generated more than a century of opinions that collectively highlight the point at which ostensibly legal planning shades into abuse and fraud. We then show how both government and corporate attorneys can exploit our empirical results and explore how these results bolster many of the normative views set forth by the scholarly and policymaking communities.

Bibliographic Details

Joshua D. Blank; Nancy C. Staudt

sham; corporate tax; corporate tax abuse; Supreme Court; judicial decision making; business purpose

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