Tenth Circuit Court of Appeals holds that the U.S. Tax Court did not abuse its discretion when it considered and ruled upon a new legal theory raised by the Government in a post-trial brief because the taxpayers did not show prejudice.
The 10th Circuit Court of Appeals rejects the District Court’s findings in support of a taxpayer who entered into a Son of BOSS transaction and holds that the transaction lacked economic substance.
The Tenth Circuit reverses and remands to the District Court. The percentage of completion method of accounting cannot be used to record income from a warranty.
Koch Industries v. United States, Docket 08-3347 (10th Cir. Apr. 27, 2010)