Economic Substance: Part One

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Economic Substance: Part One

November 04, 2026

United States
United States
United States

What makes a transaction “real” for federal tax purposes?

In the debut episode of Eversheds Sutherland’s Federal Tax Podcast, Partner Sandy Bradford and Counsel R.J. Hagerman, unpack the economic substance doctrine and why it matters for taxpayers. They explore the doctrine’s two-part test, its potential application to a wide range of transactions, and the significant penalties that can apply when a transaction is found to lack economic substance.

Tracing the doctrine from Gregory v. Helvering to recent cases including Liberty Global and Patel, Sandy and R.J. also discuss how economic substance relates to other judicial anti-abuse doctrines and the evolving debate over when the doctrine is “relevant” in the first place.

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Key contacts

sandybradford@eversheds-sutherland

Cassandra S. Bradford

Partner

Atlanta, United States

RichardHagerman@eversheds-sutherland.com

Richard “R.J.” Hagerman

Counsel

Washington, DC, United States

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