The Internal Revenue Service won another tax shelter case, this one involving a sale-in/lease-out transaction.
In the case, AWG Leasing Trust v. United States, two large national banks - Key Bank and PNC Bank -disputed adjustments that the IRS made to partnership returns for the 1999-2003 tax years. In those adjustments, the IRS found that the banks' partnership mischaracterized a 1999 transaction as a $423 million purchase of a German waste-to-energy facility. The IRS said the transaction was a thinly veiled tax dodge. The IRS claimed that AWG owed approximately $88 million in taxes for the 1999-2003 tax years and would owe much more in subsequent years.
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