1. Please Explain at least two ways Chesapeake sabotaged its own tax position in 1999 on its tax return and/or financial statements (from the court case).
2. What could they have done differently to strengthen its arguments that this entire transaction was not merely tax avoidance with no business purpose?

1. What happened with PwC as part of this transaction?
2. Do you think the partners were aware of the position they were putting their firm in by the manner in which they structured their engagement?
3. What could PwC have done differently to remove perceived bias towards its client?

Refer to the court case Canal Corporation & Subsidiaries V. Commissioner, 135 TC 199, Code Sec(s) 707;752