United States Sixth Circuit

A tax court decision upholding over $3 million in tax deficiencies issued by the Internal Revenue Service against petitioner is affirmed since relevant statutes and case law permit an increase in basis in debt (or stock) only when a taxpayer makes an economic outlay to a corporation, and petitioner's status as a coobligor on a loan established just the possibility, not the reality, of an economic outlay for a corporation.

Appellate Information

• Decided 08/04/2006
• Published 08/04/2006

Judges

• Before:  GILMAN, SUTTON, and COOK, Circuit Judges.

Court

• United States Sixth Circuit

Counsel

• For Appellees:
  
• ARGUED:  Donald J. O'Connor, Cleveland, Ohio, for Appellant.   Michelle B. Smalling, United States Department of Justice, Washington, D.C., for Appellee.   ON BRIEF:  Donald J. O'Connor, Colleen A. O'Connor, Cleveland, Ohio, for Appellant.  Michelle B. Smalling, Teresa E. McLaughlin, United States Department of Justice, Washington, D.C., for Appellee.