Court will uphold tax penalty

WASHINGTON (AP) -- The Supreme Court says two Texans' partnership doesn't keep the IRS from penalizing them for what the agency called a sham tax shelter.

The Supreme Court unanimously upheld the agency's 40 percent penalty against Gary Woods and Billy Joe "Red" McCombs, who held ownership positions with the San Antonio Spurs and the Minnesota Vikings.

The two men were involved in a tax shelter that was disallowed by the IRS. The agency then billed Woods and McCombs for the past taxes and added a 40 percent penalty, which they challenged in court.

The 5th U.S. Circuit Court of Appeals threw out the penalty. But Justice Antonin Scalia said for the unanimous court that the lower court's decision was reversed, the penalty was legal and could be applied in this case.

Justices say case should be moved

WASHINGTON (AP) -- The Supreme Court says an agreement between two companies over where lawsuits against each other can be filed should be honored.

The high court ruled unanimously Tuesday for Atlantic Marine Construction Co., which had hired J-Crew Management, Inc. to provide construction labor and materials for the construction of a child development center at Fort Hood in Texas.

Their agreement included a clause that any lawsuit would be heard in Virginia. But when J-Crew sued, it filed in Texas and the courts refused to move the case to Virginia as specified in the contract.

"A district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer," Alito said. The justices sent the case back down to the lower courts.

Published: Thu, Dec 5, 2013


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