Roy E. Stanley of Fayetteville took on the IRS and won.
Earlier this month, Chief U.S. District Judge P.K. Holmes III awarded Stanley and his wife, Carol, a judgment of $144,428 against the IRS in a dispute over an audit.
Roy Stanley, who is a former president of Fayetteville’s Lindsey Management Co. of Fayetteville, sued the United States of America in 2014 in U.S. District Court in Fayetteville.
In 2012, the Fayetteville office of the IRS determined that the couple’s income from real estate activities for tax years 2009 and 2010 should be reclassified from nonpassive income to passive income, resulting in additional taxes and interest owed — $69,851 for 2009 and $52,291 for 2010, according to Holmes’ order.
Stanley and his wife disagreed with the IRS’ position that “material participation in the management or operation” of apartment complexes and golf courses required that a person be physically present on the sites.
For the tax years in question, he served as president or president emeritus and part owner, working half-time in management and operation from Lindsey Management’s home office.
“They were being totally unreasonable,” Stanley told Arkansas Business. “And so every now and then you have to punch a bully in the nose, and so we did.”
Holmes ruled in favor of Stanley on his motion for summary judgment, before the case went to trial.
A U.S. Department of Justice spokeswoman said in an email to Arkansas Business that it was disappointed by the judge’s ruling but couldn’t “comment further while we review the opinion.”
Stanley said the IRS still could appeal the ruling to the 8th U.S. Circuit Court of Appeals.
“If they do, then my wife and I will fight them at the 8th Circuit,” he said.
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