Tax Court Ruling Signals Cross-Border Loan Scrutiny

In this article published by Law360, Eversheds Sutherland Partners Xenia Garofalo, Karl Zeswitz and Brian Tschosik analyze the Tax Court’s decision in Aventis Inc. v. Commissioner, which held that the securitization arrangement at issue failed to qualify as a FASIT and instead required a traditional debt equity analysis.

The Aventis opinion, coupled with other recent events, may portend a broader scrutiny of foreign investors in US debt. The opinion has elements found in the recent final and proposed section 892 regulations as well as in the YA Global case, which is on appeal.

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