Estate of Harold Stuller v. United States

SHAH, District Judge.

Wilma Stuller and her late husband, Harold, bred Tennessee Walking Horses on their horse farm in Tennessee. 1 They incorporated the horse-breeding operation as L.S.A., Inc., and claimed its substantial losses as deductions on their tax returns. But the IRS determined that the horse-breeding was not an activity engaged in for profit and so assessed taxes and penalties against the Stullers. The IRS also penalized the Stullers for failing to timely file their 2003 return. After paying up, the appellants, Wilma Stuller, Harold’s estate; and LSA, sued the government for a…