Boulware v. United States

[LPC]

The Supreme Court heard oral arguments yesterday in an interesting case that includes some tax protester-like issues.

Boulware took money from a corporation which he as a majority shareholder and gave it to his girlfriend, then failed to report the money as income. At trial he was prevented from introducing evidence that the corporation had no earnings and profits, so that the money he took was a return of capital and not income, the lower courts holding that there must be evidence of a contemporaneous intent to make a distribution with respect to his stock, and that the money was income because it was embezzled.

Given the BS that tax protesters are allowed to introduce to negate the issue of willfulness, I'm surprised that a majority shareholder would be prevented from producing evidence showing that there could have been some doubt about the tax treatment of money taken from the corporation he controls.