In 2010, Congress codified the economic substance doctrine and created a strict liabil-ity penalty for understatements attributable to transactions that did not have economic substance. Practitioners universally expressed concern that it was not wise to attach a strict liability penalty to a standard as ambiguous as the economic substance doctrine. Some commentators predicted that courts would avoid ﬁnding that transactions lacked eco-nomic substance because the resulting strict liability penalty for a taxpayer who may not have realized that the transaction did not have “economic substance” was not fair or appropriate. Recent court decisions have fulﬁlled those predictions by refusing to invali-date transactions based on economic substance and focusing instead on other doctrines such as sham transaction and substance over form to ﬁnd that the transactions in those cases should not be respected thereby invalidating the claimed tax beneﬁts. It is not surprising that courts are ﬁnding ways to avoid the economic substance doctrine in light of the harsh penalty that Congress has attached to it.