Tax Bytes: Week of March 16, 2026

Tax developments

IRS disregards charitable LLC arrangement under multiple anti abuse doctrines in Field Attorney Advice 20260401F

In newly released Field Attorney Advice 20260401F, the IRS rejected a promoted “charitable LLC” arrangement that purported to generate large charitable deductions while allowing taxpayers to retain control over assets and income. Applying multiple anti abuse doctrines—including economic substance, sham partnership, and assignment of income principles—the IRS treated all LLC income as taxable to the taxpayers and disallowed the charitable contribution deduction. The FAA is also notable for acknowledging a threshold relevance inquiry under the codified economic substance doctrine, underscoring continued uncertainty in the Service’s litigation posture.

Read our full alert here.

Recent Eversheds Sutherland Tax insights 

Tax Court Ruling Signals Cross-Border Loan Scrutiny

In this article published by Law360, 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. 

Read the full article. 

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