United States v. Canada (In re Canada)

MEMORANDUM OPINION AND ORDER

JANE J. BOYLE, UNITED STATES DISTRICT JUDGE

Appellant United States of America (IRS) appeals a final order of the bankruptcy court sustaining Debtor/Appellee William R. Canada, Jr.’s objection to the IRS’s claim for civil penalties. In this case, the IRS attempts to impose a $40,346,167.87 civil penalty on Canada’s bankruptcy estate for his failure to register as tax shelters certain financial arrangements he marketed and sold from 1998 to 2001 as an employee of the Heritage Organization, LLC. The bankruptcy court held that the arrangements were not “tax shelters”…