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RSA 21-J:38-a · Sham Transactions May Be Disallowed

Title
I: THE STATE AND ITS GOVERNMENT
Chapter
21-J · DEPARTMENT OF REVENUE ADMINISTRATION
Status
current
Official source linked
Yes
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21-J:38-a Sham Transactions May Be Disallowed. –

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I.

The commissioner may disallow any sham transaction in ascertaining any taxpayer's tax liability. With respect to transactions between members of a controlled group, the taxpayer shall bear the burden of establishing by a preponderance of the evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group was not a sham transaction. For all other taxpayers, the commissioner shall bear the burden of establishing by a preponderance of the evidence that a transaction or series of transactions was a sham transaction.

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II.

In administering any tax, the commissioner may apply the doctrines of economic reality, substance over form, and step transaction.

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III.

If the commissioner disallows a sham transaction under paragraph I, the applicable limitation period for assessing the tax, together with applicable penalties, charges, and interest, shall be extended for a period equal to the applicable limitation period. Nothing in this paragraph shall be construed as extending an applicable limitation period for claiming any refund of a tax.

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IV.

The commissioner may adopt rules under RSA 541-A that are necessary to administer this section, including rules establishing criteria for identifying sham transactions.

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V.

In this section:

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(a)

"Controlled group" means 2 or more person related in such a way that one person directly or indirectly owns or controls the business operation of another member of the group.

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(b)

"Sham transaction" means a transaction or series of transactions without economic substance because there is no business purpose or expectation of profit other than obtaining tax benefits.

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(c)

"Tax" includes any tax administered by the commissioner.

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(d)

"Taxpayer" includes any person or entity subject to a tax. Source. 2005, 177:139, eff. July 1, 2005.

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Source note

Source. 2005, 177:139, eff. July 1, 2005.

Source history

  • 2005, 177:139, eff. July 1, 2005

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