This report examines a corporate blocker structure frequently used by private equity funds to shield some of their investors from some adverse tax consequences of investing in operating partnerships and other flow-through entities. Part I briefly reviews the typical reasons for creating a blocker structure and the types of investors who do and do not want to hold the underlying investment through a blocker structure. Part II describes a partial blocker structure that is often used by a private equity fund to reconcile the conflicting concerns of various constituencies among its investors. Part III considers whether the special allocations of partnership income required in that structure can withstand a challenge under the "substantial economic effect" principles of section 704(b).