Court Case Analysis: The Wells Fargo Case

The Wells Fargo case is the latest STARS transaction case to be decided however on a motion for partial summary judgment raised by Wells Fargo. Wells Fargo was heard in the U.S. District Court for the District of Minnesota and the case is appealable to the Eighth Circuit. The court discussed and employed the two-part test set forth in Rice’s Toyota World, Inc. v. Commissioner. Under this test, the two considerations whether a transaction is a sham is if the transaction “lacks economic substance because of no real potential for profit exists apart from tax benefits” and if the transaction “was not motivated by any economic purpose outside of tax considerations.” In the court’s discussion of the objective prong, the court raises the issue in

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