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Worldwide Equipment, a Mack Truck dealer, remitted a 12% federal excise tax collected from purchasers of its heavy-duty trucks, and sought a refund, claiming that the trucks, designed for use in the Appalachian coalfields, qualified as exempted, “off-highway” vehicles under 26 U.S.C. 7701(a)(48). The statute, 26 U.S.C. 6416(a), requires a refund claimant to show that it has made arrangement to avoid double payments and unjust enrichment by submitting written customer consent forms. Worldwide did not supply such consents to the IRS. In its denial, the IRS did not refer to the failure to supply consents. The district court, relying on long-standing Supreme Court and Sixth Circuit precedents applying predecessor statutory provisions, dismissed Worldwide’s refund claims on nonwaivable sovereign immunity grounds because the consent forms were statutorily required as part of a “duly filed” claim under 26 U.S.C. 7422(a). The Sixth Circuit affirmed. Worldwide’s failure to file its customer consent forms at the administrative stage violated section 6416(a); therefore, the claims had not been “duly filed with the Secretary, according to the provisions of law in that regard,” violating section 7422(a), so that federal courts are without jurisdiction to consider Worldwide’s refund claims. View "Worldwide Equipment of Tennessee, Inc. v. United States" on Justia Law

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In this appeal, the New Jersey Supreme Court considered whether the 2000 and 2001 financial agreements between plaintiffs EQR-Lincoln Urban Renewal Jersey City, LLC (EQR-Lincoln), and EQR-LPC Urban Renewal North Pier, LLC (EQR-North Pier), and defendant, the City of Jersey City (City), incorporated 2003 amendments to the Long Term Tax Exemption (LTTE) Law, N.J.S.A. 40A:20-1 to -22. Plaintiffs were limited liability companies that qualified as urban renewal entities under the LTTE Law. Each plaintiff entered into a separate financial agreement with the City to obtain a property tax exemption relating to an urban renewal project involving construction of an apartment building. Among other things, the financial agreements required plaintiffs to pay the City an “annual service charge” in lieu of property taxes. Plaintiffs filed a two-count complaint seeking a declaratory judgment against the City seeking: (1) a judgment declaring that the applicable law and financial agreements permitted plaintiffs to pay “excess rent” to affiliated entities under certain ground leases, with the effect of eliminating the “excess net profit” that plaintiffs might otherwise owe to the City; and (2) a judgment declaring that the parties’ financial agreements incorporated future changes to applicable law, such that plaintiffs could calculate their “allowable profit rate” in accordance with the 2003 amendments to the LTTE Law. The trial judge granted partial summary judgment on Count II, reasoning that the express language of the contract, “as amended and supplemented,” demonstrated that the parties agreed to incorporate future amendments to the LTTE Law in their financial agreements. The trial judge further concluded that the 2003 amendments to the LTTE Law applied to the financial agreements, and that legislative history supported his conclusions. The trial judge denied the City’s motion for reconsideration. The Appellate Division reversed, finding LTTE Law did not sanction plaintiffs’ unilateral changes to their financial agreements. The Supreme Court affirmed the Appellate Division. View "EQR-LPC Urban Renewal North Pier, LLC v. City of Jersey City" on Justia Law

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In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its property taxes on oil and gas produced from leaseholds. Oxy failed to deduct certain costs it was entitled to deduct. By the time it realized the mistake, the protest period had expired. The company nonetheless contended it was entitled to abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A), C.R.S. (2017). The county board of commissioners maintained that the abatement-and-refund provision did not apply because Oxy was the sole source of the error. Relying on Colorado Supreme Court precedent, the court of appeals held that Oxy couldn't receive abatement and refund for overpayment due to its own mistake. The Supreme Court held section 39-10-114(1)(a)(I)(A) gave taxpayers the right to seek abatement and refund for erroneously or illegally levied taxes resulting from overvaluation caused solely by taxpayer mistake. Therefore, Oxy was entitled to abatement and refund for its overpayment of taxes in the tax year at issue in this appeal. View "OXY USA Inc. v. Mesa County Board of Commissioners" on Justia Law

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The Ninth Circuit affirmed the tax court's decision on a petition for redetermination of federal income tax deficiencies that turned on whether an investment by HP could be treated as equity for which HP could claim foreign tax credits. In this case, HP wanted its investment in a foreign entity to be treated as equity, so that HP would be entitled to the foreign tax credits that the entity—a so-called "FTC generator"—produces. FTC generators are entities that churn out foreign credits for U.S. multinationals, which companies typically desire if they pay foreign taxes at a lower average rate than domestic taxes. The panel held that its test was "primarily directed" at determining whether the parties subjectively intended to craft an instrument that is more debt-like or equity-like, and the tax court did not err in finding that HP's investment was best characterized as a debt. The panel also held that the tax court did not err in considering HP's put, purchased from ABN, as part of the "overall transaction" in characterizing HP's interest in the entity as debt or equity. Finally, the tax court's judgment—that HP's purported capital loss was really a fee paid for a tax shelter—was certainly based on a permissible view of the evidence. View "Hewlett-Packard Co. v. CIR" on Justia Law

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In the underlying property tax appeal, the Tax Court rejected a request by the Department of Revenue and the county assessor to increase the real market value of taxpayer’s property, and the court later awarded taxpayer attorney fees against the department under ORS 305.490(4)(a). The department appealed the attorney fee award only. The Oregon Supreme Court determined that even though the Tax Court also rejected the taxpayer’s request for a reduction in real market value, the legal prerequisite for a discretionary attorney fee award under that statute was met. The Supreme Court also concluded that the Tax Court did not err in applying most of the factors on which it relied in making the fee award. However, the Court concluded that the lower court’s use of one factor was erroneous, thus bringing into question the court’s overall exercise of discretion. Accordingly, the fee award was vacated and the matter remanded for the court to exercise its discretion without considering that factor. View "Ellison v. Dept. of Rev." on Justia Law

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The Supreme Court affirmed the tax court’s denial of relief to Ronald and Dee Johnson, who filed this action challenging the property taxes that Hennepin County assessed against their property. The tax court granted the County’s motion to dismiss the petition for tax years 2007 through 2012 because those claims were not filed in compliance with Minn. Stat. 278.01-.02 and dismissed the Johnson’s constitutional claims for lack of jurisdiction. The tax court then granted judgment in favor of the County on the Johnsons’ remaining claims challenging the assessment for the 2013 tax year. Thereafter, the tax court denied the Johnsons’ five post-trial motions. The Supreme Court affirmed, holding that the evidence in the record adequately supported each of the tax court’s decisions at issue. View "Johnson v. County of Hennepin" on Justia Law

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The Fourth Circuit affirmed the district court's decision holding respondent in contempt after she failed to produce certain documents pursuant to an IRS summons. In this case, the IRS was investigating respondent's income tax liability and was seeking various documents. The court held that United States v. Rylander, 460 U.S. 752 (1983), was controlling in this case and that respondent's arguments against Rylander were meritless. The court also held that the district court did not abuse its discretion in finding petitioner in contempt where the IRS established that she had committed at least a constructive violation of the Enforcement Order by failing to produce documents presumptively within her possession or control, and respondent failed to satisfy her burden of demonstrating that she made in good faith all reasonable efforts to comply with the order. View "United States v. Ali" on Justia Law

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District courts have discretion to award the equitable relief of a "gross-up" adjustment to compensate for increased income-tax liability resulting from a plaintiff's receipt of a back-pay award in one lump sum. In this case, the Ninth Circuit vacated the district court's order denying plaintiff a tax adjustment of a damages award in a Title VII case. The jury awarded damages for back pay and emotional distress, as well as punitive damages. The district court refused to consider adjusting plaintiff's lump sum back-pay award to account for the corresponding increse in his tax liability. The panel reversed and remanded for further proceedings, and addressed other issues in a concurrently filed memorandum disposition. View "Clements, Jr. v. CenturyLink Inc." on Justia Law

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The Supreme Court affirmed the Board of Tax Appeals’ (BTA) decision on remand adopting the appraisal valuation of the property owner’s appraiser for the second time. The property at issue was a vacant 22.27-acre parcel that the Delaware County auditor valued at $654,100 for tax year 2011. The property owner challenged the valuation and presented an appraisal determining a value of $580,000 for the property. The Delaware County Board of Revision (BOR) ordered a reduction to $580,000 after adopting the appraisal. The BTA affirmed the adoption of the appraisal. The Supreme Court issued a remand order based on the parties’ stipulation that the BTA should address certain issues. On remand, the BTA addressed those issues and again relied on the appraisal of the property owner’s appraiser. The Supreme Court affirmed, holding that the BTA acted reasonably and lawfully when it relied on the appraisal. View "Olentangy Local Schools Bd. of Education v. Delaware County Board of Revision" on Justia Law

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The Supreme Court vacated the decision of the Board of Tax Appeals (BTA) affirming the Franklin County Board of Revision’s (BOR) reduced valuation of a residential property in the amount of $65,000 for tax year 2011. The Franklin County auditor assigned a true value of $113,000 for tax year 2011. The owner filed a complaint seeking a reduction. The BOR reduced the property’s value to $65,000. The BTA upheld the BOR’s determination of value as sufficiently supported by the record. The Supreme Court remanded the matter to the BTA, holding that the BTA failed to evaluate independently the evidence to determine the value of the subject property. View "South-Western City School District Board of Education v. Franklin County Board of Revision" on Justia Law