Cir

MEMORANDUM

This appeal concerns tax positions filed by Hawaiian Isles Enterprises, Inc. (HIE) and HIE Holdings, Inc. (Holdings). First, the founder and controlling shareholder of HIE and Holdings, Michael Boulware, faced criminal and civil litigation for fraud and tax evasion. HIE and Holdings paid Boulware’s substantial legal defense fees and claimed these fees as deductible business expenses. Second, HIE purportedly determined that it was owed a refund for 1989-1995 for overpaying its tobacco tax. After HIE purportedly determined that it had misapplied the all-events test in using self-help to obtain a refund, HIE omitted from its returns the refund income from the years in which it had been reported and reported it in later years, claiming a net operating loss (NOL) for the income eliminated in the earlier years. The IRS was not persuaded that taxpayers were entitled to take either position. In a thorough opinion, the Tax Court, for the most part, agreed, characterizing most of the legal fees as Boulware’s personal expenses and determining that HIE was not entitled to its claimed net operating loss carryfor-ward for 1998, 2000, 2001, and 2002. We affirm the judgment of the Tax…