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).