IRS Loses Bid To Strike Down Stock Ownership Tax Shelter

Law360, New York (December 16, 2013, 7:10 PM EST) -- The U.S. Tax Court denied the Internal Revenue Service's attempt to slap a North Carolina distressed debt investor with back-tax liability Monday, saying an employee stock ownership holding company shielded him from tax liability for now.

Judge Albert G. Lauber denied the IRS' summary judgment motion, saying an employment agreement between Larry Austin, business partner Arthur Kechijian and the stock holding company caused the stock to be subject to a substantial risk of forfeiture and therefore substantially nonvested, allowing the men to escape taxation.

“[The] employment...
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