Company Loses Second Challenge to IRS Treatment of Stock Plan

A federal judge for a second time rejected allegations by a Wisconsin business that the IRS unfairly penalized its employee stock ownership plan set up by a man the agency calls a “tax shelter promoter.”

Solid Ground Transportation Inc., along with its affiliated entities and owners, alleged that the IRS violated the Administrative Procedure Act by failing to follow notice-and-comment procedure before automatically scrutinizing plans such as theirs set up by Lex Byers. The US District Court for the Eastern District of Wisconsin rejected that argument last year, and ruled Monday that the plaintiffs’ second try doesn’t fare any better. ...