Block on Trump's Asylum Ban Upheld by Supreme Court
The Federal Circuit Court of Appeals came down with a ruling on a Son-of-Boss case.
Before we get into the details of what a “Son-of-Boss” case really means, let’s talk a bit about the court’s ruling.
The case came from the Court of Federal Claims, where the Internal Revenue Service's earlier determination had been dismissed.
The IRS had said that certain transfers made between a partnership and a trust were shams. Sham transactions-- that's a word to take note of before we get into a further discussion on Son-of-Boss.
The Court of Federal Claims held that it did not have jurisdiction to determine an issue in the case, namely the identity of the partners involved in the partnership. The Federal Circuit reversed this finding on appeal.
The decision of Court of Federal Claims was also reversed on the granting of summary judgment to the taxpayers on the imposition of a tax penalty.
Finally, the Federal Circuit dismissed an appeal by the taxpayers on the summary judgment granted to the government, on negligence related penalties as well as penalties for failure to act reasonably and in good faith.
Now, enough of the court's opinion. Let's move to what "Son-of-Boss" really means.
Back in the 1990's, the IRS started coming down hard on tax shelters. Tax shelters, while a broad definition, refers to a sham to hide money from the IRS. Well, speaking in broad terms it does.
A typical "Son-of-Boss" scheme usually had paper losses that offset gains, so that there would be less tax liability.
Going back to the case at hand, here's what you need to take away: The Federal Circuit reversed the jurisdiction holding of the Federal Claims Court, vacated the holding on the gross valuation penalty, and dismissed the taxpayer's appeal on the negligence penalty. The case has been remanded.
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