IRS Can Maintain Suit to Recoup $80.9 Million From Shareholders

The IRS can move ahead with a lawsuit to collect $80.9 million from a family of 17 shareholders the agency has accused of generating fake capital loss to avoid paying tax, after a federal judge denied the shareholders’ request to toss the case.

Judge Edgardo Ramos of the US District Court for the Southern District of New York said the IRS met its burden to show that Vance Finance and Holding Corp.'s 2002 transaction—which the agency said was a “Midco” tax shelter that involved selling stocks to render the business insolvent and incapable of paying capital gains—was at least suspicious. ...