This transaction, along with others, was labelled "an economic sham" by the judge because of the "circular nature of funds among related entities--Dow and its subsidiaries."
Now that is not a good thing!
Dow Chemical Lose $1 Billion in Deductions in Tax Case
By Andrew Azjac - Bloomberg BusinessWeek
Dow Chemical Co. (DOW)’s claim to $1 billion in tax deductions was based on transactions with sham partnerships promoted by Goldman Sachs Group Inc. (GS) and law firm King & Spalding LLP, a federal judge ruled, throwing out the company’s bid to recover the money.The Internal Revenue Service correctly rejected the tax benefits created by the complex partnerships from 1993 to 2003 because the transactions were designed to exploit perceived weaknesses in the tax code and not for legitimate business purposes, U.S. District Judge Brian Jackson said in a ruling filed yesterday in federal court in Baton Rouge, Louisiana,.
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