Exploring Tax Law: Business Purpose and Substance Over Form Rules Combat Tax Avoidance. Key Cases: Gregory v. Helvering, IRC vs. Duke.

Judicial anti-avoidance doctrines in tax law focus on preventing tax avoidance through two main principles: the business purpose rule and the substance over form rule. The business purpose rule requires a transaction to have a legitimate business purpose beyond tax avoidance, as established in Gregory v. Helvering. The substance over form rule emphasizes the economic reality over legal form, addressing issues like sham transactions and the misuse of legal structures to avoid taxes. This principle was highlighted in IRC vs. Duke of Westminster, which legitimized tax planning within legal bounds. Various doctrines, such as sham transactions and piercing the corporate veil, further explore these principles.