The Formation Of Garrison Litigation Management Group

3428 Words Apr 24th, 2015 14 Pages
“As to the astuteness of taxpayers in ordering their affairs so as to minimize taxes, the very meaning of a line in the law is that you intentionally may go as close to it as you can if you do not pass it. This is so because there is no public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions.” (Case 1)
According to an Journal on Regulation published by Yale University, throughout the years especially in the mid-1990s corporate abuse the system by creating tax shelters, a common scheme typically involving complex financial transactions between corporation, partnerships, trust, legal instruments and others to artificially offset their taxable income. Tens of billions are estimated to be lost in tax revenue due to these shelf tax created by companies that took advantage in how complex the Internal Revenue Code to create paper losses to offset their taxable income.
To understand better how the complexity of the Internal Revenue Code affects both parties I focus my research paper in the formation of Garrison Litigation Management Group created by Coltec Industries, Inc. a publicly-traded holding company. Garrison was created to separate potential asbestos liabilities following a complex series of prearranged steps to reduce potential tax cost qualifying under section 351.
In the first case it was decided that Coltec was right to receive a refund for capital loss due to asbestos liabilities and in case number two the United Stated…
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