Simpson v. United States

ORDER

HANSON, Chief Judge.

This matter is before the Court on cross motions for summary judgment, under Rule 56, Federal Rules of Civil Procedure. The narrow question for decision is whether corporate income tax liquidation treatment is justifiable for a sole proprietorship which had employed a statutory election to be taxed at corporate income tax rates for eight years, until the termination of that election by operation of law. At issue is the validity of Treasury Regulation § 1.1361-16(b), which provides that corpo rate liquidation treatment shall be imposed upon proprietorships such as the…