News + Events
New York partner discusses a taxpayer victory that shocked the IRS
Equipment Leasing Newsletter
January 2010
New York partner Phil Spector had his article “Taxpayer Victory in Con Edison LILO Shocks IRS” published in the January Law Journal Newsletters’ Equipment Leasing Newsletter (Vol. 28, No. 12).
In the article, Spector observes that “it has been over a year since he reported on the contest between the IRS and corporate taxpayers over the tax treatment of equipment leasing transactions with tax-exempt lessees known as LILOs and SILOs.”
He continues: “Last year’s taxpayer defeat in the AWG case nudged many taxpayers into unfavorable settlements with the IRS. But, as reported here, the AWG decision left open the possibility of a taxpayer victory in a properly argued trial of the question of fact of whether the lessee in a LILO or SILO was certain to exercise its fixed price purchase option – a question which, if answered in the affirmative, defeats the lessor’s claim to tax ownership under longstanding judicial precedent.”
“That trial occurred earlier this year in the Federal Court of Claims and the result, reported last month, is a stunning victory for the taxpayer, Consolidated EdisonCompany v. United States, No. 06-305T (Fed. Ct. Cl.), October 21, 2009.”
Spector’s article in its entirety is a detailed analysis of the case and its implications for the taxpayer and IRS alike.