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Pepperdine University School of Law

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Monday, March 3, 2008

Supreme Court: Shareholder Can Invoke Return of Capital Defense in Criminal Tax Prosecution Without Supporting Documentary Evidence

The Supreme Court today unanimously reversed the Ninth Circuit and held that a taxpayer charged with criminal tax evasion can argue that the money he took from his closely-held corporation was a nontaxable return of capital without producing evidence that either he or the corporation intended a return of capital at the time of the distribution.  Boulware v. United States, 06-1509 (3/3/08) (Souter, J.), rev'g 470 F.3d 931 (9th Cir. 2006).

Update:

http://taxprof.typepad.com/taxprof_blog/2008/03/supreme-court-u.html

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