U.S. Supreme Court hammers McCombs in unanimous verdict

[AustinF1]

U.S. Supreme Court rules unanimously against Red McCombs in IRS tax shelter scheme:

 

http://www.bizjournals.com/sanantonio/blog...gainst-san.html

[NickHolt]

Here's the text of that story from the San Antonio Business Journal as written by W. Scott Bailey:

 

Supreme Court rules against San Antonio entrepreneur Red McCombs

 

by W. Scott Bailey, Reporter/Project Coordinator - San Antonio Business Journal

 

The U.S. Supreme Court has unanimously ruled that San Antonio businessman Red McCombs and business partner Gary Woods owe hefty penalties to the Internal Revenue Service after participating in an offsetting-option shelter designed to shield them from more than $40 million in taxes.

 

McCombs and Woods participated in the shelter known as “COBRA,” in 1999.

 

Justice Antonin Scalia, who delivered the opinion of the court, wrote that McCombs and Woods invested $3.2 million in two companies, generating tax losses that, “if treated as valid, could have shielded more than $45 million of income from taxation.”

 

The Supreme Court was asked to address whether McCombs and Woods owed a penalty for tax underpayments attributable to valuation misstatements. It ultimately reversed a decision by a lower court, ruling that the penalty is applicable.

 

McCombs and Woods have argued that a 40 percent IRS penalty is not applicable in this case. The Supreme Court’s 17-page ruling does not address directly the final dollar amount that Woods and McCombs may owe in tax penalties.

 

The Business Journal has reached out to McCombs for comment.