Talbott Construction Co. v. United States

MEMORANDUM

SWINFORD, Chief Judge.

This is a tax refund case. It is before the court on defendant’s “Motion for Reconsideration of Order Directing Production, Inspection and Copying of Documents”.

This suit arises from action by the Commissioner of Internal Revenue disallowing interest expense on indebtedness owed by the plaintiff corporation to its shareholders. This indebtedness is represented by debenture bonds. Plaintiff claims that the disallowance is erroneous and that the interest deduction should be allowed in determining taxable income.

After suit to recover a tax refund was commenced,…