Sugarloaf Fund LLC v. Commissioner of Internal Revenue

Tax Court did not err in finding that tax shelter used by taxpayer-partnership was sham used to generate artificial losses for said taxpayer. Instant tax shelter was essentially same shelter found to be sham in Superior Trading, 728 F.3d 676, and Sugarloaf Fund, 911 F.3d 854, in different tax years at issue in instant case.  In general, tax shelter pertained to acquisition and transfer of highly distressed and uncollectible accounts receivables from Brazil retailers. Moreover, record lacked evidence to support taxpayer’s assertion that there was organizational restructuring that supported finding that tax shelter was committed to lawful profit motive. Also, Tax Court could properly allocate all relevant income of partnership to designer of tax shelter who had controlled partnership.