A Sixth Circuit panel in the case of Summa Holdings Inc. v. Commissioner, No. 16-1712, CA6 reversed the Tax Court in case involving transactions involving a Domestic International Sales Corporation (DISC) and a Roth IRA should be recharacterized as being a method of making impermissibly large contributions to the Roth IRA. 

The case concludes by noting:

The last thing the federal courts should be doing is rewarding Congress’s creation of an intricate and complicated Internal Revenue Code by closing gaps in taxation whenever that complexity creates them.

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Sometimes things don’t go exactly as planned—and multiple errors cascade to create an issue.  That was the case for the taxpayer who requested PLR 201617019. 

In this case the taxpayer wished to deposit after tax funds into a new traditional IRA.  The taxpayer already had an existing traditional IRA, but he did not want the funds going into that IRA since he planned to convert the funds in the new IRA to a Roth IRA.