It was intended to stop the common practice of deducting
greenmail payments made to halt hostile takeovers.
As a result of Five Star Manufacturing, some corporate taxpayers took the position that
greenmail payments were deductible.
In addition to withdrawing TAM 8516002, TAM 8626001 specifically considered the treatment of
greenmail payments.
6 /PRNewswire/ -- Proposed limitations on
greenmail payments by Jefferson-Pilot Corporation (NYSE: JP) have been "reluctantly withdrawn" by Resources Planning Corporation (RPC), a long-term JP shareholder.
Observation: This decision could adversely affect corporations that paid and deducted greenmail under a survival theory by threatening the deductibility of
greenmail payments.