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ROSELLE v BERGER & MONTAGUE, P.C.

Summarizing by Bradley Pearce

RUBIN v. UNITED STATES OF AMERICA

Case Type:
Business
Case Status:
Affirmed in part and Reversed in part
Citation:
No. 16-56633 (9th Circuit, Sep 24,2018) Published
Tag(s):
Ruling:
9th Circuit affirmed in part, reversed in part, and remanded district court (CD Cal.) judgment in favor of the US (IRS) in suit for tax refund by taxpayer based on return filed by bankruptcy trustee. Taxpayer claimed trustee substantially overstated net income on Subchapter S corporation's tax return, resulting in excess tax against him. Taxpayer's personal tax return asserted basis of disagreement and qualified as "statement identifying the inconsistency" as required by 26 USC 6037(c)(2)(A)(ii).
Procedural context:
Non-debtor taxpayer sued U.S. to recover tax based on tax return filed by bankruptcy trustee. District Court (CD Cal.) entered judgment on the pleadings against taxpayer in favor of U.S. Plaintiff-taxpayer appealed to 9th Circuit.
Facts:
Taxpayer was the sole shareholder of a subchapter S corporation, whose gains and losses were not taxed at the corporate level, but instead flowed through to taxpayer as its sole shareholder. The corporation was put into involuntary bankruptcy. Bankruptcy trustee filed tax return on behalf of debtor entity. Shareholder filed tax return stating his disagreement with the corporation's tax return filed by the bankruptcy trustee. Taxpayer attached forms explaining why he disagreed with the income and expenses reflected on the corporate tax return, and how his revised numbers would affect his reported income, losses, deductions, and credits. Taxpayer sought refund in excess of $8 million for three tax years. IRS denied refund. Taxpayer sued US for refund. US District Court held that taxpayer's return failed to comply with requirement of a "statement identifying the inconsistency" under 26 USC 6037(c)(2)(A)(ii).
Judge(s):
Clifton, Callahan, Hoyt

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