Economic Substance: Part One

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Economic Substance: Part One

November 04, 2026

United States
United States
United States

What makes a transaction “real” for federal tax purposes?

In the debut episode of Eversheds Sutherland’s Federal Tax Podcast, Partner Sandy Bradford and Counsel R.J. Hagerman, unpack the economic substance doctrine and why it matters for taxpayers. They explore the doctrine’s two-part test, its potential application to a wide range of transactions, and the significant penalties that can apply when a transaction is found to lack economic substance.

Tracing the doctrine from Gregory v. Helvering to recent cases including Liberty Global and Patel, Sandy and R.J. also discuss how economic substance relates to other judicial anti-abuse doctrines and the evolving debate over when the doctrine is “relevant” in the first place.

The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer. Eversheds Sutherland is a provider of legal and other services operating through various separate and distinct legal entities. For further information about these entities and Eversheds Sutherlands' structure please see the Legal Notice page of this website.

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Key contacts

sandybradford@eversheds-sutherland

Cassandra S. Bradford

Partner

Atlanta, United States

RichardHagerman@eversheds-sutherland.com

Richard “R.J.” Hagerman

Counsel

Washington, DC, United States

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