Goulding v. United States
United States Court of Appeals for the Seventh Circuit
957 F.2d 1420 (1992)
- Written by Kate Luck, JD
Facts
Randall Goulding (plaintiff) was an attorney hired to prepare tax returns for several limited partnerships. Goulding prepared the partnerships’ tax documents, including the Schedules K, which calculated the partnerships’ profits, and the Schedules K-1, which assigned profits and losses to each partner. The Schedules K-1 were distributed to the partners, who used the numbers in one entry line on their own tax returns. Goulding did not prepare the partners’ returns or provide advice to the partners. In calculating the partnerships’ losses, Goulding included expenses that were found to be nondeductible. The Internal Revenue Service assessed Goulding penalties for the negligent preparation of the partners’ tax returns. Goulding brought suit against the federal government (defendant) in district court to challenge the penalty. The district court upheld the imposition of the penalty. Goulding appealed, arguing that he never saw the partners’ returns and did not receive compensation for preparing them and, therefore, could not be considered the preparer.
Rule of Law
Issue
Holding and Reasoning (Ripple, J.)
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