Justia Tax Law Opinion Summaries

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Proposition 13 and Proposition 218 amended the California Constitution to require that any special tax adopted by a local government entity take effect only if approved by a two-thirds vote of the electorate. The court of appeal recently interpreted these constitutional provisions “as coexisting with, not displacing, the people’s power to enact initiatives by majority vote” and held that a measure placed on the ballot as a local citizens’ initiative requires a majority, not a supermajority, vote to pass.Sixty percent of San Franciscans voting on Proposition G— an initiative entitled “Parcel Tax for San Francisco Unified School District”—approved the measure. San Francisco filed suit to establish that Proposition G was valid. The complaint against “All Persons Interested” was answered by Nowak, who argued that Proposition G is invalid because it failed to garner the two-thirds vote required by Proposition 13 and Proposition 218. Nowak also contended that a provision of Proposition 218 unique to parcel taxes, (art. XIII D, 3(a)), requires a two-thirds vote of the electorate to enact Proposition G. Nowak sought to distinguish the earlier decisions on the grounds that Proposition G was conceived and promoted by local government officials and was not a valid citizens’ initiative. The court of appeal rejected all of Nowak’s arguments, standing by its earlier decisions. View "City & County of San Francisco v. All Persons Interested in Matter of Prop. G" on Justia Law

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The federal government sought to encourage delinquent taxpayers to pay up: by threatening to withhold or revoke their passports until their tax delinquency was resolved. No nexus between international travel and the tax delinquency needed to be shown; the passport revocation served only to incentivize repayment of the tax debt. A challenge to the constitutionality of this approach was a matter of first impression; appellant Jeffrey Maehr was one such taxpayer whose passport was revoked for non-payment of taxes. He argued the revocation violated substantive due process, ran afoul of principles announced in the Privileges and Immunities clauses, and contradicted caselaw concerning the common law principle of ne exeat republica. The district court rejected these challenges. Finding no reversible error, the Tenth Circuit affirmed the district court on each of these arguments. View "Maehr v. U.S. Department of State" on Justia Law

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The Supreme Court reversed the decision of the Board of Tax Appeals (BTA) dismissing these appeals of final determinations of the tax commissioner on the grounds that they were untimely, holding that Am.Sub.H.B. No. 197 tolled the time limitation for filing the appeals, and Appellant filed the notices of appeal with both the tax commissioner and the BTA during the tolling period.On April 29, 2020, the tax commissioner journalized his final determinations upholding the tax assessments in each case. Service was completed by certified mail on May 4, 2020. Appellant delivered a notice of appeal to the tax department on June 26, 2020. The next day Appellant filed the notices of appeal with the BTA. The BTA dismissed both appeals as untimely. The Supreme Court reversed, holding that section 22(A)(1)(c) of H.B. 197 tolled Appellant's appeal period and that Appellant's appeals were timely filed. View "Chapman Enterprises, Inc. v. McClain" on Justia Law

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The Fifth Circuit affirmed the district court's grant of the IRS's motion to dismiss an action brought by plaintiff, seeking to recover penalties that he paid for filing late tax returns and making late tax payments for the 2012-2015 tax years. Plaintiff alleged that he was entitled to the "reasonable cause" exception to the otherwise mandatory penalties.The court concluded that plaintiff failed to sufficiently plead reasonable cause under I.R.C. 6651(a)(1)–(2) for exemption from the mandatory penalties where plaintiff could have used ordinary business care and prudence to assure that his taxes were filed and paid, much like he conducted business and employed a CPA while incarcerated. Likewise, the court concluded that plaintiff failed to demonstrate reasonable cause under I.R.C. 6654 for the same reasons. View "Lindsay v. United States" on Justia Law

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Plaintiffs-Appellants Walter “Gil” Goodrich (individually and in his capacity as the executor of his father—Henry Goodrich, Sr.’s— succession), Henry Goodrich, Jr., and Laura Goodrich Watts brought suit against Defendant-Appellee United States of America. Plaintiffs claimed that, in an effort to discharge Henry Sr.’s tax liability, the Internal Revenue Service (“IRS”) wrongfully levied their property, which they had inherited from their deceased mother, Tonia Goodrich, subject to Henry Sr.’s usufruct. A magistrate judge previously determined Plaintiffs were not the owners of money seized by the IRS, and that represented the value of certain liquidated securities. The Fifth Circuit determined that whether Plaintiffs were in fact owners of the disputed funds was an issue governed by Louisiana law. The Fifth Circuit declined further review until the Louisiana Supreme Court had a chance to review the ownership issue in the first instance. View "Goodrich, et al v. United States" on Justia Law

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The Supreme Judicial Court affirmed the judgment of the superior court affirming a decision of the State Board of Property Tax Review upholding the Town of Madison's denial of Madison Paper Industries' (MPI) request for a property tax abatement for the 2016-17 tax year, holding that the Board made no errors of law, and its findings were supported by competent evidence in the record.The Board found MPI's appraisal and its underlying factual assertions were not credible and that MPI had failed to meet its burden of persuasion. On appeal, MPI argued that the Board failed to apply the Maine Constitution's required that it apply the "just value" standard to valuing the property. The Supreme Judicial Court affirmed, holding that the Board's determinations were not erroneous and that its findings were supported by the evidence. View "Madison Paper Industries v. Town of Madison" on Justia Law

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Taxpayer Level 3 Communications, LLC (Level 3) challenged the Oregon Tax Court’s determination of the real market value of its tangible and intangible property for the 2014-15, 2015-16, and 2016-17 tax years. Level 3 argued that the Tax Court held that the central assessment statutory scheme permitted taxation of the entire enterprise value of the company, contrary to the wording of applicable statutes that permit taxation only of a centrally assessed corporation’s property. According to Level 3, the Tax Court applied that erroneous holding to incorrectly accept the Department of Revenue’s (the department’s) valuations of Level 3’s property for the relevant tax years. The Oregon Supreme Court concluded Level 3 misconstrued the Tax Court’s decision, and the Tax Court did not err by accepting the department’s valuations. Accordingly, the Tax Court’s judgment was affirmed. View "Level 3 Communications, LLC v. Dept. of Rev." on Justia Law

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Greenville County Council implemented what it called a "road maintenance fee" to raise funds for road maintenance and a "telecommunications fee" to upgrade public safety telecommunication services. Plaintiffs, three members of the South Carolina General Assembly, claimed the two charges were taxes and, therefore, violated section 6-1-310 of the South Carolina Code (2004). The South Carolina Supreme Court agreed: the road maintenance and telecommunications taxes were invalid under South Carolina law. View "Burns v. Greenville County Council" on Justia Law

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In this appeal requiring the Supreme Court to determine the priority of tax liens levied on real property by the Georgetown Special Taxing District the Supreme Court reversed the judgment of the trial court subordinating liens acquired by Defendant to the Georgetown Fire District, holding that the fire district's tax liens were subordinate to those of Defendant, which, in turn, were subordinate to those of the town.Plaintiffs - the town of Redding, the Redding Water Pollution Control Commission, and Georgetown Fire District - brought this action to foreclose municipal liens against Defendant RJ Tax Lien Investments, LLC, who had been assigned real estate tax liens originally levied by the taxing district. The trial court granted the motions for partial summary judgment with respect to priority filed by the town and the fire district and rendered a judgment of strict foreclosure in favor of the town and the fire district. The Supreme Court reversed in part, holding that the trial court incorrectly concluded that Defendant's liens were subordinate to those of the fire district. View "Redding v. Georgetown Land Development Co., LLC" on Justia Law

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The Supreme Court affirmed the judgment of the district court holding that the "resort service fee" that Boyne USA, Inc. charges guests is not subject to Montana's lodging facilities use tax and forfeited guests deposits collected by Boyne are not subject to either the state use tax or sales tax, holding that the district court did not err.Specifically, the Supreme Court held that the district court (1) did not err in holding that Boyne's resort services fee was not subject to the lodging facilities use tax; (2) did not err in holding that the resort services fee was subject to the sales tax; and (3) did not err by holding that forfeited guest deposits are not subject to the lodging facilities use tax or the sales tax. View "Boyne USA, Inc. v. Department of Revenue" on Justia Law