Myron’s Enterprises v. United States
United States Court of Appeals for the Ninth Circuit
548 F.2d 331 (1977)
Facts
Myron’s Enterprises (Myron’s) (plaintiff) retained earnings over $300,000 for several years. Myron’s claimed to need $100,000 per year for working capital and $375,000 for the likely purchase of a ballroom that Myron’s was leasing. Myron’s was engaged in ongoing attempts to purchase the ballroom property for $300,000 cash. Myron’s made multiple offers that were genuinely considered by the owner of the ballroom. The commissioner of the Internal Revenue Service (IRS) (defendant) imposed taxes on the accumulated earnings of Myron’s, finding that the reasonable needs of the business never exceeded $21,000 in working capital. Myron’s filed a claim in district court for a tax refund. The district court found that Myron’s had excess accumulated earnings, but less than the amount determined by the commissioner. Myron’s appealed to the United States Court of Appeals for the Ninth Circuit.
Rule of Law
Issue
Holding and Reasoning (Sneed, J.)
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