Justia Tax Law Opinion Summaries

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The Supreme Court affirmed the order of the circuit court granting summary judgment in favor of the director of the Arkansas Department of Finance and Administration (DFA) and dismissing American Honda Motor Company's challenge to the DFA's denial of its request for a corporate tax refund, holding that the circuit court correctly granted summary judgment in favor of DFA.American Honda filed an action for judicial relief under the Arkansas Tax Procedure Act, Ark. Code Ann. 26-18-101 et seq., challenging DFA's decision to deny its request for a corporate tax refund. The circuit court granted summary judgment in favor of DFA. The Supreme Court affirmed, holding (1) judicial review of DFA's statutory interpretation of the Tax Procedure Act is de novo; and (2) while the circuit court improperly gave great deference to DFA's interpretation of the Tax Procedure Act, the circuit court correctly granted summary judgment in favor of DFA. View "American Honda Motor Co. v. Walther" on Justia Law

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The Supreme Court affirmed the decision of the trial court denying Indiana Land Trust's motion to set aside a tax deed, holding that the LaPorte County Auditor gave adequate notice reasonably calculated to inform Indiana Land Trust Company of the impending tax sale of the property.From 2009 to 2015, the owner of vacant property did not pay property taxes. Through a third-party service, the county auditor sent simultaneous notice of an impending tax sale by way of certified letter and first-class mail to the address listed on the deed for the property. The owner, however, had moved and had not updated its address. Later, notice was published in the local newspaper. The property eventually sold and a tax deed was issued to the purchaser. The original owner moved to set aside the tax deed due to insufficient notice. The Supreme Court affirmed the trial court's denial of Indiana Land Trust Company's motion to set aside the tax deed, holding that the county auditor provided notice reasonably calculated, under all circumstances, to apprise the owner of the pendency of the action and afforded them an opportunity to present their objections. View "Indiana Land Trust Co. v. XL Investment Properties, LLC" on Justia Law

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The Second Circuit affirmed the district court's grant of summary judgment for the Cayuga Indian Nation of New York and the district court's permanent injunction enjoining the County from foreclosing on the Cayuga Indian Nation's real property for nonpayment of taxes. The court agreed with the district court that tribal sovereign immunity from suit bars the County from pursuing tax enforcement actions under Article 11 of the New York Real Property Tax Law against the Cayuga Indian Nation. The court explained that the County's foreclosure proceedings are not permitted by the traditional common law exception to sovereign immunity that covers certain actions related to immovable property. In this case, the foreclosure actions fall outside the purview of the common law version of the immovable-property exception. The court also rejected the County's reading of City of Sherrill v. Oneida Indian Nation of New York, 544 U.S. 197 (2005), as abrogating a tribe's immunity from suit. View "Cayuga Indian Nation of New York v. Seneca County" on Justia Law

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The Jefferson County, Alabama Board of Education ("the Board") and several of its employees sought to avoid the application of an occupational tax imposed by the City of Irondale ("City"). The Board and its employees argued that public-school employees were exempt from the occupational tax because, they contended they provided an essential government service. "But the importance of a state employee's role, even a role as important as a public-school employee, does not remove that employee's obligation to pay a duly owed occupational tax." The Alabama Supreme Court affirmed the trial court's judgment in favor of the City. View "Blankenship et al. v. City of Irondale" on Justia Law

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After Pine Mountain granted North American Land Trust conservation easements, Pine Mountain claimed tax deductions for the easements under I.R.C. 170. The IRS denied the deductions and the tax court held that the 2005 and 2006 easements were not "granted in perpetuity" within the meaning of section 170(h)(2)(C) because, although Pine Mountain had agreed to extensive restrictions on its use of the land, it had reserved to itself limited development rights within the conservation areas; that the 2007 easement complied with section 170(h)(5)(A)'s requirement that the easement's conservation purposes be "protected in perpetuity," notwithstanding its inclusion of a clause permitting the contracting parties to bilaterally amend the grant; and that the value of the 2007 easement is $4,779,500—which, it turns out, is almost exactly midway between the parties' wildly divergent appraisals.The Eleventh Circuit affirmed in part, reversed in part, and remanded for further proceedings. The court held that the 2005 and 2006 easements satisfy section 170(h)(2)(C)'s granted-in-perpetuity requirement; that the existence of an amendment clause in an easement does not violate section 170(h)(5)(A)'s protected-in-perpetuity requirement; and that the tax court applied the wrong method for valuing the 2007 easement. View "Pine Mountain Preserve, LLLP v. Commissioner" on Justia Law

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RFM-TREI Jefferson Apartments, LLC; RFM-TREI Lincoln Apartments, LLC; Dickinson Homestay, LLC; and Lodgepros Dickinson, LLC (together “the Taxpayers”) appealed district court judgments affirming the Stark County Board of Commissioners’ (“the Board”) denials of their applications for tax abatements or refunds. The Taxpayers collectively owned two apartment complexes and two hotels located in the City of Dickinson. The Taxpayers filed applications for abatement or refund of their 2016 property taxes. The Taxpayers’ opinions of value for each property differed from the City’s valuations by a range of roughly $1.8 million to $20.3 million. After holding a hearing, the City recommended the Board deny each application. The Board indeed denied the abatement applications in four separate written decisions. Using the same language in each, the Board concluded the assessor’s valuations were not “in error, invalid, inequitable, unjust, or arrived at in an arbitrary, capricious, or unreasonable manner.” The decisions also explained the Board did not believe the Taxpayers provided “sufficient enough information relating to the subject properties, or the local market for competing properties, to lead us to the same value conclusions requested by the applicant.” The district court affirmed each denial in separate, written orders and judgments. After review, the North Dakota Supreme Court concluded the Board acted arbitrarily and unreasonably in adopting assessments exceeding the true and full value of the property. The Court reversed the district court judgments and the Board’s decisions denying the Taxpayers’ abatement applications. The matters were remanded for a new hearing to determine the “true and full value” of the properties and reconsideration of the abatement applications. View "RFM-TREI Jefferson Apartments v. Stark County Board of Comm'rs" on Justia Law

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This dispute involved ad valorem taxes for the tax years 2013 through 2016. In October 2012, D90 Energy, LLC, purchased two gas wells and one saltwater disposal well. The wells were subject to ad valorem property taxation in Jefferson Davis Parish, Louisiana. Relying on a Commission regulation applicable to oil and gas wells, D90 argued that a purchase price in a valid sale is fair market value; therefore, the wells should be valued at $100,000.00 for each of these tax years. For each tax year, the Assessor rejected D90’s documentation of the sale, explaining, in part, that his office never uses the sales price as fair market value for oil and gas wells. Rather, the Assessor used valuation tables provided by the Commission, which take into account age, depth, type, and production of the wells. D90 appealed each assessment to the Commission, presenting documentary evidence and live testimony to establish the $100,000.00 purchase price for the wells and the arms-length nature of the sale. It presented additional evidence to establish that the condition and value of the wells were virtually identical for each tax year. The district court affirmed the Commission’s valuations for all four tax years. Reviewing only what was presented to the Assessor, the court of appeal reversed the district court and reinstated the Assessor’s valuation. The Louisiana Supreme Court granted D90’s writ application to determine the correctness of the assessments, the proper scope and standard of review, and the legal effect of D90’s failure to pay taxes under protest. After review, the Court determined the district court was correct in affirming the Commission, thus reversing the appellate court's judgment. View "D90 Energy, LLC v. Jefferson Davis Parish Board of Review" on Justia Law

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For the purpose of applying 31 U.S.C. 5321(a)(5)'s civil penalty, a "willful violation" of the Report of Foreign Bank and Financial Accounts (FBARs) reporting requirement includes both knowing and reckless violations, even though more is required to sustain a criminal conviction for a willful violation of the same requirement under section 5322.The Fourth Circuit affirmed the district court's conclusion that the undisputed facts establish that defendants' failure to file the FBARs for 2007 and 2008 was objectively reckless. In this case, among other things, defendants knew that they were holding a significant portion of their savings in a foreign bank account and earning interest income on that account; defendants knew that interest income was taxable income and that foreign income was taxable in the United States; and defendants reported interest income to their accountant from domestic banks and foreign income earned in Saudi Arabia but failed to report foreign interest income. Furthermore, the Finter Bank account was a numbered account with "hold mail" service; the Swiss bank accounts were by no means small or insignificant and thus susceptible to being overlooked by defendants; and defendants stated that they did not have a foreign bank account on their tax returns. The court also affirmed the district court's conclusion that the civil penalty for a willful FBAR violation is established by 31 U.S.C. 5321(a)(5)(C)–(D), not 31 C.F.R. 1010.820(g). Finally, the civil penalties against defendants were timely assessed, and the enforcement action was timely filed. View "United States v. Horowitz" on Justia Law

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The Appellants objected to the IRS’s attempts to collect and audit information about their marijuana-related business practices, arguing: (1) the IRS investigation was quasi-criminal, exceeded the Agency’s authority, and was being conducted for an illegitimate purpose; (2) even if the investigation had a legitimate purpose, the information sought was irrelevant; and (3) the investigation was in bad faith and constituted an abuse of process because (a) the IRS may share the information collected with federal law enforcement agents, (b) the IRS summonses are overly broad and require the creation of new reports, (c) the dispensaries had a reasonable expectation of privacy in the data they tender to state regulatory authorities, and (d) those state authorities could not provide the requested information without violating Colorado law. The Appellants further contended the district court applied the wrong standard of review when it denied motions to quash and granted motions to enforce the summonses. Relying on the reasoning outlined in Standing Akimbo, LLC v. United States, 955 F.3d 1146, 1150–69 (10th Cir. 2020), the Tenth Circuit rejected Appellants' arguments and affirmed the district court's rulings in favor of the IRS. View "Speidell v. United States" on Justia Law

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Vermont National Telephone Company (VNT) appealed the state Commissioner of Taxes’ determination that, pursuant to Department of Taxes Regulation section 1.5833-1, the capital gain VNT earned from the 2013 sale of two Federal Communications Commission telecommunications licenses was subject to Vermont Tax. Additionally, VNT argued the penalty the Commissioner assessed for VNT's failure to report the 2013 sale violated 32 V.S.A. section 3202(b)(3) and the state and federal Constitutions. Finding no reversible error, the Vermont Supreme Court affirmed the Commissioner. View "Vermont National Telephone Company v. Department of Taxes" on Justia Law