Starman Investment, Inc. v. United States

OPINION

Before WALLACE and KENNEDY, Circuit Judges, and FERGUSON, * District Judge. WALLACE, Circuit Judge:

The IRS assessed an accumulated earnings tax deficiency against Starman under Int.Rev.Code § 531. The company paid the tax and filed suit in the district court for a refund. The district court granted judgment for the taxpayer and the government filed a timely notice of appeal. We affirm.

The Starman stock is held by four brothers and their uncle, all of whom were active in the company’s business. Before 1968, the company was engaged in manufacturing its own line of products and in…