In United Parcel Service of America, Inc. v. Commissioner, the Tax Court held that the taxpayer must include “excess value charges” (“EVCs”) in its income for the tax year 1984. The case involved a complex scheme whereby the taxpayer collected the EVCs, forwarded them to an insurer, and the insurer forwarded the proceeds to Overseas Partners, Ltd. (“OPL”), a subsidiary of the taxpayer. The court found that the taxpayer, not OPL, earned the income and thus, under prevailing “sham transaction” case law, the court deemed the transfer an improper assignment of income. In addition to requiring inclusion of the EVC income, the court denied deductions made by the taxpayer and assessed penalties for substantial understatements of tax and negligent or intentional disregard of the rules.Part I of this Note describes the facts of the case. Part II details the court’s opinion. Part III analyzes the doctrinal and analytic soundness of Judge Ruwe’s opinion in light of federal court precedent. Part IV explains the tax planning implications of the decision.