Barry M. Smith & Rochelle Smith v. Commissioner

151 T.C. No. 5

UNITED STATES TAX COURT BARRY M. SMITH AND ROCHELLE SMITH, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 14900-15. Filed September 18, 2018. Ps owned, through a pair of grantor trusts and an S corporation, controlled foreign corporations (CFCs) incorporated in Hong Kong and later in Cyprus. In 2008 the Hong Kong CFC paid Ps a dividend of $12.3 million. In 2009 the Cypriot CFC paid Ps a dividend of $57.1 million. In 2009 the Cypriot CFC also canceled an account re- ceivable owed by Ps’ S corporation. That account receivable had an outstanding balance of…