The Dow Chemical Company v. U.S.

Case Updates

NCLC urged the Supreme Court to review the Sixth Circuit’s erroneous refusal to consider expected conduct when analyzing a business tax deduction pursuant to the economic substance doctrine. The economic substance doctrine prohibits companies from seeking tax credits or deductions for transactions that lack economic substance apart from the expected tax benefit. In its brief, NCLC explained the court below misconstrued prior Supreme Court precedent to support its conclusion that a court can only look at past conduct and disregard the company’s evidence it planned to engage in future conduct that would support the tax deduction or credit. The Sixth Circuit’s exclusionary rule would undermine a wide swath of economic transactions which heavily rely on future conduct to be profitable.