Divorced Woman Bears Tax Debt of Company Founded With Ex-Husband

A divorcee remains a part shareholder of a bankrupt real estate investment business she founded with her former husband and so is on the hook for its tax liabilities, the US Tax Court held Wednesday.

The US sought to hold Karen Veeraswamy as Ashand Enterprises’ 50% owner when the government sought to collect tax as a part of the bankruptcy proceedings. She petitioned the US Tax Court and said she didn’t receive distributions of Ashland’s income, and argued that she instead had “abandoned” her interest in the company.

But Tax Court Judge Mark V. Holmes said even if Veeraswamy believed ...