Charlotte's Office Boutique, Inc. v. Commissioner of Internal Revenue

On its face, this is an appeal by Charlotte’s Office Boutique, Inc., from the Tax Court’s determination that its royalty payments to Charlotte Odell, one of its two shareholders, were actually wages and that appellant was liable for employment taxes on those wages and penalties. This appeal, however, also raises a challenge to the Tax Court’s jurisdiction, which was first raised before the Tax Court by the Commissioner of Internal Revenue (“Commissioner”) and is asserted by both parties on appeal, with the Commissioner taking the laboring oar.

Following the trial in the Tax Court, the Commissioner filed a' motion to dismiss alleging that the Tax Court lacked jurisdiction over three of the four tax years in question. Appellant joined in the motion. The Tax Court, however, denied the motion and rendered judgment in favor of the Commissioner on all the issues framed by appellant’s petition for review.

Appellant filed a notice of appeal objecting to both the Tax Court’s determination of jurisdiction and its rejection of appellant’s challenges to the determination of taxes and penalties. In response, the Commissioner first asserts that the Tax Court lacked jurisdiction for three of…