U.S. Appeals Court Upholds Tax Court Ruling, Finds Taxpayer Liable for S Corporation Tax Deficiencies, Penalties

The U.S. Court of Appeals for the Second Circuit affirmed the Tax Court’s decision finding that Taxpayer was a part owner of an S corporation and liable for associated tax deficiencies and penalties. Taxpayer, an individual, claimed she was not an owner of the S corporation in 2014 and therefore not liable for taxes on its income. The Tax Court found substantial evidence that Taxpayer remained a 50 percent owner, including corporate records and Taxpayer’s own statements in bankruptcy proceedings asserting her ownership interest. The court held that the Tax Court did not err in: (1) finding Taxpayer was a ...