The U.S. Court of Appeals for the First Circuit reversed a federal district court and concluded that the government was entitled to summary judgment in a case concerning the economic substance of certain transactions that involved the taxpayer’s claim for foreign tax credits.
The case is: Santander Holdings USA, Inc. v. United States, No. 16-1282 (1st Cir. December 16, 2016). Read the First Circuit’s decision [PDF 54 KB]
The tax credits at issue were claimed for taxes that had been arranged to be paid to the United Kingdom as part of a structured transaction (one that became the subject of heightened scrutiny from the IRS and that subsequently was forbidden by regulation). The district court awarded summary judgment to the taxpayer. The First Circuit reversed, stating its agreement with the Federal Circuit’s reasoning in a 2015 case, Salem Financial Inc. v. United States.
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