According to a report by Law360, Dallas lawyer William R. Canada Jr. received good news on Monday, May 8, 2017. After fighting the Internal Revenue Service since April 2015, Canada was informed in a Texas federal court, Case Number 3:16-CV-02000, that he did not owe the IRS $40 million in penalties that it claimed was the result of Canada promoting to his clients what the IRS interpreted as tax shelters between 1998 and 2002.
U.S. District Judge Jane Boyle in the Northern District of Texas agreed with a previous ruling in June 2016 by Judge Barbara Houser, a bankruptcy judge, that the IRS had no legal ground to penalize Canada under any tax shelter codes because he never personally made investments for his clients. His employer, Heritage Organization LLC, also never made investments. Instead, both Heritage and Canada merely explained to their wealthy clients how to navigate the statutes that existed at the time to save money on capital gain taxes through Treasury security investments and sales. The customers that liked the strategy then used third-party brokerage firms to conduct the transactions. Canada’s lawyer, John P. Lewis Jr., expressed the hope that the IRS will now drop the matter.
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Law Offices of Darrin T. Mish, P.A.: Tax Attorney