Dist. Ct. did not err in finding that IRS’s tax levy against plaintiff-company was valid under circumstances where plaintiff-company: (1) purchased assets of entity that had actually owed such taxes at time it went out of business; (2) subsequently used entity’s trademark, web site, email address and phone number; (3) hired entity’s workers; and (4) pursued same line of business as entity. Record also showed that President and 40% owner of entity continued to play leading role in plaintiff-company, which was incorporated on same day entity went out of business. As such, Dist. Ct. could properly find that plaintiff was mere “continuation” of entity so as to support instant levy. Fact that plaintiff’s sole shareholder was wife of entity’s President or that plaintiff changed focus from entity’s sales of instruments used in health care to sales of instruments used in cosmetic surgery did not require finding that plaintiff was separate business for purposes of defeating tax levy.
Federal 7th Circuit Court
Civil Court
Income Tax