Justia Tax Law Opinion Summaries

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The Town of Ludlow appealed a Property Valuation & Review Division (PVR) hearing officer’s decision lowering the fair market value of two quartertime-share condominium properties, Jackson Gore Inn and Adams House, located at the base of Okemo Ski Resort. On appeal, the Town argued that the time-share owners in Jackson Gore Inn and Adams House failed to overcome the presumption of validity of the Town’s appraisal. The Town also argued that hearing officer incorrectly interpreted 32 V.S.A. 3619(b) and failed to properly weigh the evidence and make factual findings. After review of the PVR hearing officer’s decision, the Vermont Supreme Court first held that the hearing officer correctly determined that the time-share owners met their initial burden of producing evidence to overcome the presumption of validity by presenting the testimony of their expert appraiser. Second, the Supreme Court conclude that the hearing officer correctly determined that section 3619 addressed who receives a tax bill when time-share owners were taxed but said nothing about how to value the common elements in condominiums. Finally, the Supreme Court concluded the hearing officer made clear findings and, in general, provided a well-reasoned and detailed decision. Accordingly, the decision was affirmed. View "Jackson Gore Inn, Adams House v. Town of Ludlow" on Justia Law

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After plaintiff successfully challenged in bankruptcy court a tax penalty assessed against him by the IRS that exceeded $40 million, plaintiff filed suit against the IRS and three IRS agents, in their individual capacities, pleading a claim for damages against the individual defendants under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), for allegedly violating his Fifth Amendment right to procedural due process. Plaintiff also sought attorney's fees he incurred litigating the penalty issue in his Chapter 11 bankruptcy case under 26 U.S.C. 7430 and the Equal Access to Justice Act. The Fifth Circuit affirmed the district court's grant of defendants' Federal Rule of Civil Procedure 12(b)(6) motion and dismissal of the action with prejudice. The court held that the district court properly concluded that this case was a new Bivens context and that special factors existed under Ziglar v. Abbasi, 137 S. Ct. 1843 (2017). The court also held that plaintiff was not entitled to recover attorney's fees because his request was untimely under 28 U.S.C. 2412(d)(1)(B) and he was not a "prevailing party" under 26 U.S.C. 7430(c)(4)(A)(ii). View "Canada, Jr. v. United States (Internal Revenue Service)" on Justia Law

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The Supreme Court reversed the decision of the district court reversing the decision of the State Board of Equalization affirming the ruling of the County Board of Equalization against the Town of Pine Bluffs in its appeal from the Laramie County Assessor's denial of a request for exemption from taxation for a daycare facility operated by the Town, holding that the County Board's order was in accordance with law, was not arbitrary, capricious or an abuse of discretion, and was supported by substantial evidence in the record. In 201y, the Town filed requests for exemption from the assessment of its daycare facility. The County Assessor denied the requests, and the County Board and State Board affirmed. The district court ruled in favor of the Town and reversed the decision of the State Board. The Supreme Court reversed and reinstated the order of the County Board, holding that the County Board's decision did not constitute reversible error. View "Eisele v. Town of Pine Bluffs" on Justia Law

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The common issue from three property tax cases presented to the Colorado Supreme Court for review centered on what constituted "residential land" under 39-1-102(14.4)(a), C.R.S. (2019). In Colorado, residential land was taxed as a lower rate than vacant land. The Mooks owned two parcels of land in Summit County, Colorado. One parcel contained the Mooks’ house, classified as residential land. The other parcel was undeveloped, and it was classified as vacant land (“the subject parcel”). The parties agreed that these two parcels didn't physically touch. The Homeowners’ Association (“HOA”) owned an approximately seventeen-foot-wide strip of land that completely separated the two properties (that strip provided other members of the HOA access to adjacent public land). The Mooks petitioned the Board of County Commissioners of Summit County (“BCC”) to reclassify the subject parcel from vacant land to residential land. The BCC denied their petition, and the Mooks appealed to the Board of Assessment Appeals (“BAA”). The BAA upheld the BCC’s decision. Notably, the BAA determined that contiguous parcels are those that are “physically connected.” Here, the residential and subject parcels didn't physically touch, and the BAA “was not persuaded that the use of the subject lot in conjunction with the residential lot was sufficient to defeat the plain meaning of contiguity.” Thus, the BAA concluded that the two parcels aren’t contiguous, and it denied the Mooks’ appeal. Taking the three appeals together, the Colorado Supreme Court concluded: (1) only parcels of land that physically touch qualify as “contiguous parcels of land;” (2) a residential improvement isn’t needed on each contiguous and commonly owned parcel of land and a landowner can satisfy the “used as a unit” requirement by using multiple parcels of land together as a collective unit of residential property; and (3) county records dictate whether parcels are held under “common ownership.” View "Mook v. Bd. of Cty. Comm’rs" on Justia Law

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This case asked the Colorado Supreme Court to construe the definition of residential land in section 39-1-102(14.4)(a), C.R.S. (2019). Stephen Ziegler (through the Stephen J. Ziegler Revocable Trust Dated July 17, 2008) owned four parcels of land in Park County, Colorado. One parcel was classified as “residential land” under section 39-1-102(14.4)(a) and taxed accordingly. However, the other three parcels remained “vacant land” and are thus taxed at a higher rate. Ziegler sought to reclassify those vacant parcels as residential land to receive a corresponding tax abatement. As it concluded in Mook v. Summit Cty. Bd. of Cty. Comm'rs, 2020 CO 12 (2020): (1) a residential improvement isn’t needed on each contiguous and commonly owned parcel of land for that parcel to be “used as a unit;” and (2) a landowner can satisfy the “used as a unit” requirement by using multiple parcels of land together as a collective unit of residential property. The BAA here applied the same legal standards that the Court expressly disavowed in Mook. Thus, it reversed the BAA’s order and remanded for the BAA to apply the standards articulated in this case to determine whether the vacant parcels qualified as “residential land.” View "Ziegler v. Park Cty. Bd. of Cty. Comm'rs" on Justia Law

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Jacobsen’s former wife, Lemmens, embezzled $400,000 from her employer, income that was not reported on the couple’s jointly filed income taxes. After Lemmens was convicted, the IRS audited the couple’s joint tax returns for 2010 and 2011 and proposed total net adjustments attributable to omitted embezzlement income of over $300,000, with corresponding deficiencies and accuracy-related penalties of over $150,000. Jacobsen sought relief under the tax code’s “innocent spouse” provision, 26 U.S.C. 6015(b), and equitable relief provision, section 6015(f). The Tax Court granted Jacobsen innocent spouse relief for 2010 but denied all relief for 2011. The Seventh Circuit affirmed. Jacobsen acknowledged that with the exception of his knowledge for 2011, the Tax Court correctly assessed the positive, negative, or neutral impact of each of the seven factors listed in Revenue Procedure 2013-34 and acknowledged that he had “reason to know” of the embezzlement income by the time he filed their 2011 tax return. He argued that the Tax Court erred when it concluded that he had actual knowledge of the unreported income for 2011. While the Tax Court could have easily decided that Jacobsen was entitled to equitable relief, nothing in the record indicates the Tax Court misapprehended the weight to be accorded Jacobsen’s knowledge or treated it as a decisive factor barring relief. View "Jacobsen v. Commissioner of Internal Revenue" on Justia Law

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In 2015, the Washington legislature enacted RCW 81.104.160(1) (MVET statute) authorizing Sound Transit to use two separate depreciation schedules to calculate motor vehicle excise taxes (MVET). Under the statute, Sound Transit could pledge revenue from a 1996 depreciation schedule for MVETs to pay off bond contracts; Sound Transit could use a 2006 depreciation schedule for all other MVETs. Though each schedule is referenced, the MVET statute did not restate in full either schedule. Taylor Black and other taxpayers alleged the MVET statute violated article II, section 37 of the Washington Constitution, stating "no act shall ever be revised or amended by mere reference to its title, but the act revised or the section amended shall be set forth at full length." The Washington Supreme Court held the MVET statute is constitutional because (1) the statute was a complete act because it was readily ascertainable from its text alone when which depreciation schedule would apply; (2) the statute properly adopted both schedules by reference; and (3) the statute did not render a straightforward determination of the scope of rights or duties established by other existing statutes erroneous because it did not require a reader to conduct research to find unreferenced laws that were impacted by the MVET statute. View "Black v. Cent. Puget Sound Reg'l Transit Auth." on Justia Law

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In this appeal from the tax court's conclusion that the market value of Relator's two parcels of improved real estate was higher than the initial assessment value determined by Hennepin County or the valuation opinion presented by the sole appraiser to testify at trial the Supreme Court reversed in part the tax court, holding that the tax court erred in its valuation determination under the sales comparison approach. Relator sought review of Hennepin County's assessed value of $8,384,300 for Relator's retail shopping center property as of January 2, 2015. After a trial, the tax court gave a final valuation determination for the property of $8,461,400. Relator appealed, arguing that the tax court's value determination was excessive. The Supreme Court affirmed in part and reversed in part, holding (1) the tax court did not err in its decision to afford no weight to Relator's expert's opinion on the income approach; but (2) the tax court erred in its valuation determination based on the sales-comparison approach. View "Inland Edinburgh Festival, LLC v. County of Hennepin" on Justia Law

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Mostoller owned the Debtor, a business that serviced oil and gas wells. The Debtor owed the Trust $3 million, secured by a blanket lien on most of the Debtor’s assets and a personal guarantee by Mostoller. The Debtor petitioned for Chapter 11 reorganization. To entice the Trust to lend more money, Mostoller agreed to assign his anticipated federal tax refund. The taxable income and losses of the Debtor, an S Corporation, passed through to Mostoller, who had paid millions of dollars in federal taxes on that income. He could file amended 2013 and 2014 tax returns to carry back the Debtor’s 2015 losses, which would offset his taxable income for those two years and trigger a refund. 26 U.S.C. 172(a), (b)(1)(A)(i). Mostoller pledged “any rights or interest in the 2015 Federal tax refund due to him individually, but attributable to the operating losses of the Debtor. The bankruptcy court approved the agreement The Debtor defaulted on the emergency loan and converted to a Chapter 7 liquidation. Mostoller first refused to file the tax returns. When the tax refund came, Mostoller tried to keep it. The district court and Third Circuit affirmed in favor of the Trust, rejecting Mostoller’s argument that he pledged his refund on taxes that he paid for 2015 alone, excluding any refund on his 2013 and 2014 taxes. That reading would make the collateral worthless, so the Trust would never have made the loan. View "In re: Somerset Regional Water Resources, LLC" on Justia Law

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The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) affirming a tax assessment against Rockies Express Pipeline, LLC (Rockies), holding that Rockies' gross receipts for tax year 2015 from the transportation of natural gas within the state of Ohio were not excluded from taxation under Ohio Rev. Code 5727.33(B)(1) as "receipts derived wholly from interstate business" and that such taxation does not violate the Commerce Clause. Rockies is an interstate pipeline that transports natural gas for others. For tax year 2015, the Ohio Tax Commissioner assessed Rockies on transactions in which natural gas entered and exited Rockies' pipeline within Ohio. Rockies petitioned the tax commissioner for reassessment, arguing that its receipts derived wholly from interstate business and were thus eligible for exclusion under section 5727.33(B)(1). The tax commissioner upheld the assessment. The BTA affirmed. The Supreme Court affirmed, holding (1) Rockies did not meet its burden of showing that its receipts fall under the exclusion in section 5727.33(B)(1) as "receipts derived wholly from interstate business"; and (2) imposing the tax under these circumstances does not violate the Commerce Clause because Rockies has substantial nexus with Ohio based on its physical presence within the State. View "Rockies Express Pipeline, LLC v. McClain" on Justia Law