Commissioner v. Estate of Travis L. Sanders, No. 15-12582 (11th Cir. 2016)Annotate this Case
The Commissioner appealed the tax court's judgment in favor of the Estate and the Government of the United States Virgin Islands. In 2010, the IRS issued notices of deficiency to Travis L. Sanders, before his death in 2012, alleging that he had not been a bona fide USVI resident during those years and that Madison, a USVI-based consulting firm that Sanders was a limited partner in, was an illegal tax shelter. Because Sanders was not a bona fide USVI resident, the Commissioner claims, Sanders was required to file tax returns with the IRS and was not entitled to the Economic Development Program (EDP) tax reduction. The court held that the statute of limitations was triggered only if Sanders actually was a bona fide resident of the USVI; in this case, the facts relied on by the tax court are insufficient to establish that Sanders ever became a bona fide resident of the USVI; and thus the court vacated the tax court's judgment. The court remanded for further proceedings.