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October 20, 2006

Floridian Thomas Sweeney was in Tax Court because he didn't report income from his K-1 from an S corporation he owned with his wife. He argued his case without a lawyer, but maybe he didn't need one. His straightforward argument didn't rely much on technicalities:

This is my whole argument, Your Honor. During the second week of January 2002, my wife proceeded to throw me out of my home, which is where the business was located. She changed the locks. She stripped our corporate bank accounts, our personal bank accounts, charged up all the cash she could on my credit cards to over $50,000, $60,000, and she physically, lock, stock, and barrel, locked me out of the corporation.

The marriage didn't last, but the S corporation election did. The judge said he had to report the K-1 income, no matter how mean his ex is.

The moral? An S corporation election can truly be a tie that binds.

Cite: Sweeney, T.C. Summ. Op. 2006-169

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