STATEMENT OF EILEEN J. O'CONNOR ASSISTANT ATTORNEY GENERAL FOR THE JUSTICE DEPARTMENT'S TAX DIVISION ON THE DECISION IN BB&T V. UNITED STATES OF AMERICA

WASHINGTON, D.C. - “Today’s decision by the United States District Court for the Middle District of North Carolina affirms that, notwithstanding vigorous and complicated paper shuffling, to have a tax deduction for lease or interest expense, you must actually incur them. And to incur them, you must have a genuine lease and genuine indebtedness, respectively. In BB&T vs. United States of America, the District Court found that the Lease-In, Lease-Out tax shelter involved neither, and therefore does not result in the tax deductions claimed by those who participate in it.”