Barry Fowler, Tax Connections

Package Theft

You may find it hard to believe, but according to delivery services like the USPS and UPS, some 23 million recipients each year don’t get their holiday goodies because thieves steal them right off the doorsteps. There is an easy way to prevent this. Simply arrange for a delivery that requires a signature upon receipt. Other options include sending gifts to the recipient’s workplace or have them delivered to a pickup location operated by the carrier. For example purchases made through Amazon can be delivered to an Amazon Locker location and retrieved by using a pickup code. There’s no extra fee to use the service, which can be selected during checkout. Amazon has about 2000 secure locations in more than 50 cities. Read More

Following is an excerpt from my book U.S. Captive Insurance Law:

After mentioning the general facts, the appellate court first noted, “It is not perfectly clear on what judicial doctrine the holding rests.” Next, the court noted that this was essentially a sham transaction case, with the IRS arguing that the court should not respect the transaction, because its only motive was tax avoidance. The court first outlined the basic concept of the sham transaction doctrine:

This economic-substance doctrine, also called the sham-transaction doctrine, provides that a transaction ceases to merit tax respect when it has no “economic effects other than the creation of tax benefits.” Even if the transaction has economic effects, it must be Read More

Analyzing UPS’ situation before and after it established the captive, the tax court noted that UPS performed all the work related to the EVCs before and after the transaction:

Before January 1, 1984, petitioner performed all the functions and activities related to the EVC’s and was liable for the damage or loss of packages up to their declared value. After January 1, 1984, petitioner continued to perform all the functions and activities related to EVC’s, including billing for and receiving EVC’s, and remained liable to shippers whose shipments were damaged or lost while in petitioner’s possession. Petitioner continued to receive shippers’ claims for lost or damaged goods, investigate and adjust such claims, and pay such claims out of the EVC revenue that it had collected from shippers. The difference between petitioner’s EVC activity before and after January 1, 1984 was that after Read More