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ECONOMIC SUBSTANCE PENALTIES
The IRS Large Business and International (LB&I) Division in July issued guidance to examiners on the recently codified economic substance doctrine limiting the application of penalties relating to the doctrine (LB&I-4-0711-015).
The Health Care and Education Reconciliation Act of 2010 (PL111-152) codified the economic substance doctrine and a related strict liability penalty for transactions entered into after March 30, 2010. The IRC § 6662(b)(6) strict liability penalty applies to any transaction lacking economic substance...