Skip to Main Content

Tax Notes Quotes Mark Allison on ConEd Case

January 10, 2013, Tax Notes

Mark D. Allison is quoted by Tax Notes concerning the Federal Circuit's January 9 reversal of a lower court's favorable decision regarding expense deductions that Consolidated Edison Co. took in connection with a leasing transaction, holding that the deductions must be disallowed based on a substance-over-form analysis.  For the complete article, please click on the above PDF.

Excerpt taken from the article.

The initially favorable decision that ConEd received in the lower court was an exception, because most of the leasing shelter cases resulted in wins for the government. The Federal Circuit's reversal gives the Justice Department a string of victories in the courts on the issue of deductible expenses incurred in LILO and sale-in, lease-out transactions (BB&T Corp. v. United States, 523 F.3d 461 (4th Cir. 2008); Altria Group Inc. v. United States, 694 F. Supp.2d 259 (S.D.N.Y. 2010); and AWG Leasing Trust v. United States, 592 F. Supp.2d 953 (N.D. Ohio 2008)).

"While the Federal Circuit decision is disappointing for LILO participants, it is hardly surprising given the trend of the courts generally on these types of transactions and specifically in light of the circuit's Wells Fargo decision," said Mark D. Allison of Caplin & Drysdale. That the foreign lessee holds and operates the asset during the term of the transaction and the purchase option funding is fully defeased "appears to serve as a virtual mental roadblock to any view that the purchase option would not be exercised," he said.


About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
©2021 Caplin & Drysdale, Chartered
All Rights Reserved.