Andy Grewal (Iowa; Google Scholar), When Is the Financial Substance Doctrine ‘Related’ to a Transaction?:

In 2010, Congress added Part 7701(o) to the tax code and codified the financial substance doctrine. That doctrine had allowed courts to override tax statutes in favor of judge-made exams. The enactment of Part 7701(o) partly addressed constitutional objections to that follow.

Sadly, when it enacted Part 7701(o), Congress failed to handle a crucial query: When does the financial substance doctrine correctly apply? The statute says that the doctrine will apply each time “related” however affords no additional elaboration of that time period. In a extremely uncommon transfer, Congress additionally mentioned that courts couldn’t look to the statute for steerage on when the doctrine may be related.