United States Court of Appeals 

for the Federal Circuit ______________________ 

GSS HOLDINGS (LIBERTY) INC.,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2021-2353

______________________ 

Appeal from the United States Court of Federal Claims 

in No. 1:19-cv-00728-EGB, Senior Judge Eric G. Bruggink.

______________________ 

Decided: September 21, 2023

______________________ 

ANDREW JOHN PINCUS, Mayer Brown LLP, Washington, DC, argued for plaintiff-appellant. Also represented 

by SAMANTHA BEAR, TIMOTHY S. BISHOP, Chicago, IL; 

GEOFFREY M. COLLINS, BRIAN WRIGHT KITTLE, New York, 

NY. 

 SHERRA TINYI WONG, Tax Division, Appellate Section, 

United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by JACOB 

EARL CHRISTENSEN, DAVID A. HUBBERT. 

 ______________________ 

Case: 21-2353 Document: 52 Page: 1 Filed: 09/21/2023
2 GSS HOLDINGS (LIBERTY) INC. v. US

Before NEWMAN, REYNA, and CUNNINGHAM, Circuit 

Judges.

Opinion for the court filed by Circuit Judge CUNNINGHAM. 

Dissenting opinion filed by Circuit Judge NEWMAN.

CUNNINGHAM, Circuit Judge.

GSS Holdings (Liberty) Inc. (“GSS”) appeals from a decision of the United States Court of Federal Claims

(“Claims Court”) granting summary judgment in favor of 

the government and denying summary judgment in favor 

of GSS with respect to GSS’s 2011 deduction claim for a 

federal tax refund or credit for the tax year ending on December 31, 2009. GSS Holdings (Liberty) Inc. v. United 

States, 154 Fed. Cl. 481 (2021) (“Decision”). Because we 

conclude that the Claims Court erred by applying an incorrect legal standard to reach its decision, we vacate the judgment and remand for a determination under the correct 

legal standard. 

I. BACKGROUND

GSS serves as the managing member and owner of Liberty Street Funding LLC (“Liberty Street”).1 See J.A. 17 

¶ 9; J.A. 1423, 1431. In September 2006, Liberty Street 

purchased a note issued by Aaardvark IV Funding Limited

(the “Aaardvark Note”) and entered into a liquidity asset 

purchase agreement (“LAPA”) for the Aaardvark Note (the 

“Aaardvark LAPA”). See J.A. 619–52, 1046–77; Decision at 

484 n.6. The Bank of Nova Scotia (“BNS”) was Liberty 

Street’s counterparty for the Aaardvark LAPA, requiring

BNS to purchase the Aaardvark Note at par value if 

1 Liberty Street Funding LLC’s predecessor was Liberty Street Funding Corp. See J.A. 17 ¶ 10; J.A. 1431. In

this opinion, we refer to both entities as Liberty Street. 

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GSS HOLDINGS (LIBERTY) INC. v. US 3

Liberty Street exercised the LAPA. See J.A. 619, 626–29, 

1111; Decision at 483–84 & n.5. 

In April 2007, in anticipation of the adoption of certain 

banking regulations, Liberty Street entered into a note 

purchase agreement with an unrelated investor, Reconnaissance Investors, LLC (“Reconnaissance”). See J.A. 19–

20 ¶¶ 19–23; J.A. 739–40, 749–61, 779–81, 790–92; Decision at 484–85 & nn.11–14. Under that note purchase 

agreement, Liberty Street issued an Expected Loss Note

(the “First Loss Note”) to Reconnaissance.2 See J.A. 19–20 

¶ 23; J.A. 253, 739–40, 804–06. Reconnaissance funded an 

account (the “First Loss Note Account”) in order to cover 

some of the risk of Liberty Street’s assets. See J.A. 137, 

753, 808–12; Decision at 485 n.14. In other words, Reconnaissance’s money paid into the First Loss Note Account 

would be used to compensate BNS in the event of a loss in 

value of Liberty Street’s assets. See J.A. 20–21 ¶¶ 25–26, 

29; J.A. 808, 810–11. 

On December 29, 2011, BNS’s subsidiary, Scotiabank 

(Ireland) Limited (“Scotiabank Ireland”), purchased the 

First Loss Note from Reconnaissance and succeeded Reconnaissance’s rights and obligations. See J.A. 148, 1003–09, 

1011–35; see also J.A. 520–26; Decision at 483–85. For tax 

purposes, Scotiabank Ireland’s investment in the First 

Loss Note was treated as a partnership interest in Liberty 

Street. See J.A. 1026; Decision at 484–86. On December 

30, 2011, Liberty Street exercised the Aaardvark LAPA, 

and BNS purchased the Aaardvark Note at a loss. See Decision at 483–85; J.A. 1090. BNS certified this loss to the 

First Loss Note holder, Scotiabank Ireland, causing Liberty Street to pay $24 million to BNS from the First Loss 

2 Reconnaissance Investors, LLC later assigned the 

First Loss Note to Reconnaissance Investors IV, LLC. See 

J.A. 21 ¶ 32; J.A. 918. In this opinion, we refer to both 

entities as Reconnaissance. 

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4 GSS HOLDINGS (LIBERTY) INC. v. US

Note Account. See J.A. 1105; Decision at 484–85. Liberty 

Street’s loss was allocated to GSS.3 See Decision at 485;

J.A. 1109–10. 

In June 2013, GSS filed an Amended U.S. Corporation 

Income Tax Return with the Internal Revenue Service 

(“IRS”) for the tax year ending December 2009 and requested to carry back the allocated 2011 loss to deduct the 

loss from its 2009 tax year. See 26 U.S.C. § 165; J.A. 30–

62; Decision at 485. In December 2014, the IRS disallowed 

the claimed loss deduction under 26 U.S.C. § 707(b)(1). See 

J.A. 1108–15; Decision at 483, 486. With respect to the 

claimed loss deduction, the IRS focused on Liberty Street’s

Aaardvark Note sale to BNS and the $24 million payment

to BNS to conclude that these transactions should be 

treated as a single transaction under the step transaction 

doctrine. See J.A. 1115; Decision at 483, 486, 490. Accordingly, the IRS disallowed the deduction under 26 U.S.C. 

§ 707(b)(1) as a loss from the sale of property (the 

Aaardvark Note) between a partnership (Liberty Street) 

and a person owning more than fifty percent of the capital 

interest in the partnership (Scotiabank Ireland, the subsidiary of BNS). See J.A. 1112–13, 1115; Decision at 483, 490. 

GSS filed a Protest, but the IRS Appeals Office issued a 

notice of disallowance in June 2017. See J.A. 71–72, 1171–

72; Decision at 486. 

In May 2019, GSS filed a complaint in the Claims 

Court seeking a federal tax refund or credit for the 2009 

tax year concerning its disallowed deduction under 26 

U.S.C. § 165. See J.A. 16–29; Decision at 486. Following 

discovery, GSS moved for summary judgment, and the 

3 Because Liberty Street received approximately 

$1.45 million in insurance proceeds from this event, Liberty Street’s claimed loss deduction for tax purposes was 

$22,549,612. J.A. 24 ¶¶ 47, 50; J.A. 1110–11, 1438–39; Decision at 484–85. 

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GSS HOLDINGS (LIBERTY) INC. v. US 5

government cross-moved for summary judgment. See Decision at 483, 486. In July 2021, the Claims Court denied 

GSS’s motion, granted the government’s cross-motion, and 

entered final judgment in favor of the government. See id.

at 483, 490; J.A. 1. 

GSS now appeals. We have jurisdiction to hear this 

appeal under 28 U.S.C. § 1295(a)(3). 

II. STANDARD OF REVIEW

We review de novo a grant and denial of summary judgment by the Claims Court. Kimble v. United States, 991 

F.3d 1238, 1242 (Fed. Cir.) (citation omitted), cert. denied, 

142 S. Ct. 98 (2021). Whether the Claims Court applied 

the correct legal standard is a question of law. See McDonnell Douglas Corp. v. United States, 323 F.3d 1006, 1014 

(Fed. Cir. 2003) (citation omitted). We also review questions of law de novo. See Golden v. United States, 955 F.3d 

981, 986 (Fed. Cir. 2020) (citation omitted). 

III. DISCUSSION

On appeal, GSS raises two independent alleged errors: 

(i) the Claims Court applied an erroneous hybrid legal 

standard that conflated the step transaction doctrine and 

the economic substance doctrine, and (ii) the Claims Court 

violated the principle of party presentation. See Appellant’s Br. 35–38, 42–44; see also Oral Arg. at 9:16–35, 

https://oralarguments.cafc.uscourts.gov/default.aspx?fl=21

-2353_01132023.mp3 (GSS acknowledging it raises both 

errors); Oral Arg. at 22:27–45 (the government acknowledging the same). We agree with GSS that the Claims 

Court erred by applying a hybrid legal standard that improperly conflated the step transaction doctrine and the 

economic substance doctrine. Because we vacate and remand on that basis, we do not reach GSS’s second challenge. 

This court has recognized that various doctrines have 

been judicially developed to enforce the purposes of the tax 

Case: 21-2353 Document: 52 Page: 5 Filed: 09/21/2023
6 GSS HOLDINGS (LIBERTY) INC. v. US

code—two of which are the step transaction doctrine and 

the economic substance doctrine. See Falconwood Corp. v. 

United States, 422 F.3d 1339, 1349 (Fed. Cir. 2005) (“The 

step transaction doctrine is a judicial manifestation of the 

more general tax law ideal that effect should be given to 

the substance, rather than the form, of a transaction[.]” (citations omitted));4 Coltec Indus., Inc. v. United States, 454 

F.3d 1340, 1353 (Fed. Cir. 2006) (“The economic substance 

doctrine represents a judicial effort to enforce the statutory 

purpose of the tax code.”). Under the end result test of the 

step transaction doctrine, courts first determine whether 

the doctrine applies by examining the series of transactions

at issue and analyzing whether the “separate transactions 

were really component parts of a single transaction intended from the outset to be taken for the purpose of reaching the ultimate result.”5 Falconwood, 422 F.3d at 1349 

(internal quotation marks and citation omitted); see also 

True v. United States, 190 F.3d 1165, 1174–75 (10th Cir. 

1999) (“[T]he step transaction doctrine . . . operate[s] [by]

collaps[ing] the individual steps of a complex transaction 

into a single integrated transaction for tax purposes.” (citation omitted)). Separately, under the economic substance doctrine, courts focus solely on “the transaction . . . 

that gave rise to the alleged tax benefit” and analyze 

whether that specific transaction had “economic substance.” Coltec, 454 F.3d at 1355–57. 

4 Our recognition of the relationship between the 

step transaction doctrine and substance over form principle dispels the dissent’s concern that we “reject[]” the substance over form principle. See Dissent at 3–4. 5 This inquiry is known as the “end result test,” one 

of the “three basic tests that define the criteria upon which 

application of the step transaction doctrine applies[.]” Falconwood, 422 F.3d at 1349. The parties agree that the two 

other tests are not at issue. See J.A. 1407, 1483.

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GSS HOLDINGS (LIBERTY) INC. v. US 7

GSS argues that the Claims Court “improperly used 

the economic substance doctrine’s rule looking only to the 

step that creates the tax benefit in analyzing the step 

transaction doctrine.” Appellant’s Br. 43. We agree and 

find that the Claims Court applied a hybrid legal standard 

conflating the step transaction doctrine and the economic 

substance doctrine, which the government agrees “are two 

separate doctrines.” Oral Arg. at 13:26–28. The Claims 

Court started its analysis by correctly recognizing that the 

parties advocated for an analysis under the step transaction doctrine. See Decision at 486 (“GSS asks the court to 

find that the step transaction doctrine was inappropriately 

applied here . . . ”); id. at 487 (explaining that the government advocated for “an application of the ‘step transaction 

doctrine’”). The Claims Court also correctly recognized 

that the end result test, which determines whether the step 

transaction doctrine applies, involves assessing the 

“[i]ntent of the taxpayer” “from the outset.” Id. at 488–89 

(first citing Falconwood, 422 F.3d at 1349; and then citing

True, 190 F.3d at 1175) (emphasis added). However, rather 

than proceeding to assess intent from the outset as required under the end result test of the step transaction doctrine, the Claims Court instead focused on the transaction 

giving rise to the alleged tax benefit as taught by the economic substance doctrine. 

Citing this court’s Coltec decision—which analyzed the 

economic substance doctrine—the Claims Court incorrectly

stated that “[t]he transaction . . . to be analyzed” here was

“the one that gave rise to the alleged tax benefit.” Id. at 

488 (quoting Coltec, 454 F.3d at 1356); see also id. (“[W]e 

find the Coltec analysis particularly apposite here . . .”). 

Applying this hybrid legal standard, the Claims Court concluded that “[t]he relevant event” to determine intent 

“[wa]s the payment out of [the First Loss Note Account] to 

BNS at the end of 2011.” Id. at 489. Examining this 2011 

timeframe, the Claims Court held that “[t]here [wa]s no 

question that the ‘taxpayer intended to reach a particular 

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8 GSS HOLDINGS (LIBERTY) INC. v. US

result’ here, namely, to use the First Loss Note payment to 

offset some of the LAPA counterparty’s losses.” Id. (quoting True, 190 F.3d at 1175). Accordingly, the Claims Court 

treated these two transactions as a single transaction. Id. 

Specifically, the Claims Court found that GSS’s claimed 

loss was properly disallowed under 26 U.S.C. § 707(b)(1), 

denied GSS’s motion for summary judgment, and granted 

the government’s cross-motion for summary judgment. Id. 

at 490.

We conclude that the Claims Court applied a hybrid legal standard to reach its decision. The government conceded as much during oral argument, stating that “about 

the hybrid test . . . the lower court did borrow from Coltec, 

which is an economic substance case [and] borrowed from 

that case to identify the correct transaction” on which to 

place its focus. Oral Arg. at 21:52–22:08; see also Appellee’s 

Br. 53–54 (the government admitting same); Oral Arg. at 

22:50–23:10 (the government agreeing that the Claims 

Court “discussed both” the step transaction and economic 

substance doctrines); Oral Arg. at 20:35–21:11 (Q: “If we 

were to find that the [Claims] Court . . . started . . . the step 

transaction analysis not at the beginning [i.e., outset], . . . 

would you concede that the [Claims] Court erred?” Government: “ . . . Yes, because the instruction from all the 

cases that the parties have cited is that you have to start 

the analysis from the beginning [i.e., outset].”). This hybrid 

application was legal error. See Smith v. Gen. Servs. Admin., 930 F.3d 1359, 1361–62 (Fed. Cir. 2019) (holding that 

the Merit Systems Protection Board legally erred by “conflat[ing] two distinct inquiries”); see also Bryant v. Dep’t of 

Veterans Affs., 26 F.4th 1344, 1347–48 (Fed. Cir. 2022) 

(holding that the Merit Systems Protection Board’s failure 

to apply the correct legal standard was “legally erroneous”); Walther v. Sec’y of Health & Hum. Servs., 485 F.3d 

1146, 1152 (Fed. Cir. 2007) (holding that special master legally erred by appearing to “apply an incorrect legal standard”). 

Case: 21-2353 Document: 52 Page: 8 Filed: 09/21/2023
GSS HOLDINGS (LIBERTY) INC. v. US 9

Accordingly, we vacate the Claims Court’s decision and 

remand for a determination under the correct legal standard. See Walther, 485 F.3d at 1146; Smith, 930 F.3d at

1367; Bryant, 26 F.4th at 1347–48. Specifically, under the 

end result test, the Claims Court must “examine[] whether 

it appears that separate transactions were really component parts of a single transaction intended from the outset 

to be taken for the purpose of reaching the ultimate result.” 

Falconwood, 422 F.3d at 1349 (internal quotation marks 

and citation omitted); see also True, 190 F.3d at 1175. 

As part of this examination, the Claims Court must determine the outset of the series of transactions, keeping in 

mind that the series of transactions should be considered 

as a whole. Comm’r v. Clark, 489 U.S. 726, 738 (1989); see

also True, 190 F.3d at 1177; Brown v. United States, 868 

F.2d 859, 862 (6th Cir. 1989). The parties dispute the 

timeframe for the outset, with GSS advocating for the 2006 

and 2007 timeframe when the Aaardvark LAPA and First 

Loss Note agreement were negotiated and entered, and the 

government advocating for the 2011 timeframe when the 

Aaardvark LAPA was renewed6 and exercised and when 

the First Loss Note Account payment was made to BNS. 

See Appellant’s Br. 33, 44–45; Appellee’s Br. 30–31. Once 

the outset’s timeframe has been assessed, the Claims Court 

must determine the intent from the outset, which is another disputed issue between the parties. See Falconwood, 

422 F.3d at 1349; Appellant’s Br. 46–48; Appellee’s Br. 30–

37. If the Claims Court does conclude that the separate 

transactions were “really component parts of a single 

6 In June 2011, Liberty Street and BNS executed a 

Master LAPA, which included a purchase commitment for 

the Aaardvark Note. See J.A. 1327–69. BNS committed to 

purchase the Aaardvark Note in an October 2011 purchase 

commitment agreement with Liberty Street. J.A. 1371–75, 

1377–78; see also J.A. 178–79. 

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10 GSS HOLDINGS (LIBERTY) INC. v. US

transaction intended from the outset to be taken for the 

purpose of reaching the ultimate result,” then the step 

transaction doctrine applies. See Falconwood, 422 F.3d at 

1349 (citation omitted). The Claims Court should conduct 

this analysis on remand. We are not suggesting any particular outcome; we are simply instructing the Claims 

Court to apply the correct legal standard. 

Even if the Claims Court applied an erroneous legal 

standard, the government contends that the intent was the 

same regardless of the timeframe, and that the Claims 

Court agreed. See Appellee’s Br. 37 (first citing Decision at 

489 (“A payment from the First Loss Note [A]ccount was 

always anticipated to be at least a partial offset of losses 

resulting from the sale of a distressed asset.”); and then 

citing Decision at 489 n.22 (“The First Loss Note was always intended to absorb the first loss stemming out of a 

decline in Liberty[] [Street]’s investments.”)); see also Appellee’s Br. 30–34. In other words, the government contends that the same outcome would be reached under the 

correct legal standard. GSS disagrees, contending that the 

intent differed at various timeframes. See Appellant’s Br. 

46–48; Appellant’s Reply Br. 11–15. Since the Claims 

Court applied an incorrect legal standard, the Claims 

Court “should make a new . . . determination under the correct standard in the first instance.” Walther, 485 F.3d at 

1152 (declining to reach the merits of a similar argument). 

To the extent any finding of the Claims Court “is derived 

from the application of an improper legal standard to the 

facts, it cannot be allowed to stand.” Id. (citations omitted). 

“In such a circumstance, this court must remand for new 

factual findings in light of the correct legal standard.” Id. 

GSS contends that under the correct legal standard, 

the step transaction doctrine would not operate to collapse

the individual steps into a single integrated transaction for 

tax purposes. See Appellant’s Br. 44–52. In other words, 

GSS urges this court to reach a determination under the 

correct legal standard in the first instance. But just as we 

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GSS HOLDINGS (LIBERTY) INC. v. US 11

will not do so at the government’s request, we will not do 

so at GSS’s request. 

IV. CONCLUSION

We have considered the government’s remaining arguments and find them unpersuasive. For the above reasons, 

we vacate the Claims Court’s judgment and remand for further proceedings consistent with this opinion.

VACATED AND REMANDED

COSTS

No costs. 

Case: 21-2353 Document: 52 Page: 11 Filed: 09/21/2023
United States Court of Appeals 

for the Federal Circuit ______________________ 

GSS HOLDINGS (LIBERTY) INC.,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2021-2353

______________________ 

Appeal from the United States Court of Federal Claims 

in No. 1:19-cv-00728-EGB, Senior Judge Eric G. Bruggink.

______________________ 

NEWMAN, Circuit Judge, dissenting.

The United States Court of Federal Claims (“CFC”) affirmed a ruling of the Internal Revenue Service (“IRS”), 

disallowing a tax loss claimed by GSS Holdings (Liberty) 

Inc. (“Liberty”).1 The loss was disallowed because the 

transaction was with a related party, and subject to 

26 U.S.C. § 707(b). The decision of the CFC was correct in 

law and as applied to the facts. From the panel majority’s 

ruling that incorrect law was applied, I respectfully dissent.

1 GSS Holdings (Liberty) Inc. v. United States, 154 

Fed. Cl. 481 (2021) (“CFC Op.”).

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2 GSS HOLDINGS (LIBERTY) INC. v. US

DISCUSSION

It is not disputed that “on December 30, 2011, BNS 

[Bank of Nova Scotia] and Liberty were related parties for 

tax purposes.” CFC Op. at 489. The IRS disallowed GSS’s 

claimed tax loss deduction, applying 26 U.S.C. 

§ 707(b)(1)(A):

[§ 707](b) Certain sales or exchanges of property with respect to controlled partnerships 

(1) Losses disallowed.

No deduction shall be allowed in respect of 

losses from sales or exchanges of property 

(other than an interest in the partnership), 

directly or indirectly, between— 

(A) a partnership and a person 

owning, directly or indirectly, more 

than 50 percent of the capital interest, or the profits interest, in such 

partnership, or

(B) two partnerships in which the 

same persons own, directly or indirectly, more than 50 percent of the 

capital interests or profits interests.

The CFC held that the claimed loss was correctly disallowed, explaining: 

Because the First Loss Note payment is properly 

classed as part of the LAPA [liquidity asset purchase agreement] investment sale, § 707(b)(1) disallows deducting losses on the sale of assets to a 

related party, and the First Loss Note payment was 

thus properly disallowed.

CFC Op. at 490. 

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GSS HOLDINGS (LIBERTY) INC. v. US 3

The transfer of money and assets was conducted 

through a complex series of steps, as the panel majority recites. Maj. Op. at 2–4. However, the majority holds that 

the CFC erred in invoking “the larger tax law concept of 

‘substance over form,’” CFC Op. at 487, and erroneously 

“applied a hybrid legal standard conflating the step transaction doctrine and the economic substance doctrine,” Maj. 

Op. at 7. However, the CFC well understood and correctly 

applied the governing law. As stated in King Enters., Inc. 

v. United States, 418 F.2d 511, 516 n.6 (Ct. Cl. 1969): 

[C]ourts have enunciated a variety of doctrines,

such as step transaction, business purpose, and

substance over form. Although the various doctrines overlap and it is not always clear in a particular case which one is most appropriate, their

common premise is that the substantive realities of 

a transaction determine its tax consequences. 

We explained the role of “step transaction” analysis within 

the “substance over form” analysis of tax effects of transactions:

The step transaction doctrine is a judicial manifestation of the more general tax law ideal that effect

should be given to the substance, rather than the

form, of a transaction, “by ignoring for tax purposes, steps of an integrated transaction that separately are without substance.”

Falconwood Corp. v. United States, 422 F.3d 1339, 1349 

(Fed. Cir. 2005) (quoting Dietzsch v. United States, 498 

F.2d 1344, 1346 (Ct. Cl. 1974)).

The CFC applied this guidance, mindful that “[t]o permit the true nature of a transaction to be disguised by mere 

formalisms, which exist solely to alter tax liabilities, would 

seriously impair the effective administration of the tax policies of Congress.” Comm’r v. Court Holding Co., 324 U.S. 

331, 334 (1945). The CFC remarked that “particularly 

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4 GSS HOLDINGS (LIBERTY) INC. v. US

close scrutiny” should be given when a transaction does 

“not affect the economic interest of independent third parties,” CFC Op. at 488 (quoting Coltec Indus. v. United 

States, 454 F.3d 1340, 1357 (Fed. Cir. 2006)), and that

“where parties are interrelated, the court may exercise ‘a 

height[en]ed level of skepticism and scrutiny in th[e] matter,’” CFC Op. at 488 n.21 (quoting True v. United States, 

190 F.3d 1165, 1173 n.6 (10th Cir. 1999)).

The panel majority faults the CFC for applying “a hybrid legal standard conflating the step transaction doctrine 

and the economic substance doctrine.” Maj. Op. at 7. The 

CFC indeed applied “the larger family of substance over 

form cases.” CFC Op. at 488. This is not a fault; it is the 

required procedure of precedent. See Frank Lyon Co. v. 

United States, 435 U.S. 561, 573 (1978) (“In applying this 

doctrine of substance over form, the Court has looked to the 

objective economic realities of a transaction rather than to 

the particular form the parties employed.”). 

This principle has spawned varied adaptations in various circumstances. See Penrod v. Comm’r, 88 T.C. 1415, 

1428 (1987) (“The step transaction doctrine is in effect another rule of substance over form; it treats a series of formally separate ‘steps’ as a single transaction if such steps 

are in substance integrated, interdependent, and focused 

toward a particular result.”).

The CFC appropriately reviewed the activity concerning transfer of the Aaardvark Note and the related parties, 

with the objective to “give tax effect to the substance, as 

opposed to the form of a transaction, by ignoring for tax

purposes, steps of an integrated transaction that separately are without substance.” Dietzsch, 498 F.2d at 1346. 

Statute and precedent are unequivocally in accord with the

CFC’s reasoned analysis. There is no basis in law or precedent for the panel majority’s rejection of the “substance 

over form” standard. 

I respectfully dissent.

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