Principal Life Insurance v. United States

OPINION

ALLEGRA, Judge.

“The principle of looking through form to substance is no schoolboy’s rule; it is the cornerstone of sound taxation____”1

“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”2

When does a taxpayer cross the fault line between the cheering fields of tax planning and the forbidding elevations of form over substance, far enough, at least, to require a transaction to be recharacterized for tax purposes? No…