United States Fourth Circuit

In a suit against the government for a tax refund originating from a "lease-in/lease-out" (LILO) transaction, summary judgment for the government is affirmed where: 1) the transaction is not a genuine lease and sublease since it does not allocate rights, obligations, and risks as in a traditional lease which disallows plaintiff from making rental deductions; and 2) plaintiff is not entitled to deduct interests paid on a loan from its taxable income since the loan does not constitute genuine indebtedness.

Appellate Information

• Argued 02/01/2008
• Decided 04/29/2008
• Published 04/29/2008

Judges

• Before WILLIAMS, Chief Judge, WILKINSON, Circuit Judge, and PATRICK MICHAEL DUFFY, United States District Judge for the District of South Carolina, sitting by designation.

Court

• United States Fourth Circuit

Counsel

• For Appellees:
  
• ARGUED:  William Kearns Davis, Bell, Davis & Pitt, P.A., Winston-Salem, North Carolina, for Appellant.  Judith Ann Hagley, United States Department of Justice, Tax Division, Washington, D.C., for Appellee.   ON BRIEF:  Alan M. Ruley, Bell, Davis & Pitt, P.A., Winston-Salem, North Carolina;  Robinson B. Lacy, Andrew S. Mason, Ann McLean Jordan, Sullivan & Cromwell, L.L.P., New York, New York, for Appellant.  Anna Mills Wagoner, United States Attorney, Greensboro, North Carolina;  Richard T. Morrison, Acting Assistant Attorney General, Gilbert S. Rothenberg, Acting Deputy Assistant Attorney General, Richard Farber, United States Department of Justice, Tax Division, Washington, D.C., for Appellee.  Steven E. Grob, Edward A. Groobert, Anthony Ilardi, Jill M. Wheaton, Dykema Gossett, P.L.L.C., Bloomfield Hills, Michigan, for Amicus Supporting Appellant.