Petitioner, the assignee of an entity that paid certain sewer connection charges, sought a refund of the charges, asserting that they were improperly charged by the Town of Bel Air. The Town’s Director of Finance denied Petitioner’s refund application. On appeal, the Tax Court granted the Town’s motion to dismiss, concluding (1) it lacked jurisdiction to consider Petitioner’s refund claim because it did not come within the purview of the refund statute, and (2) even if the sewer connection charges were miscalculated or illegally imposed the common law voluntary payment doctrine precluded Petitioner from obtaining a refund. The Supreme Court reversed, holding (1) Petitioner may pursue its refund claim under the refund statute; (2) Petitioner’s claim is not barred by the voluntary payment doctrine; and (3) the Tax Court has jurisdiction to consider the appeal. View "Brutus 630, LLC v. Town of Bel Air" on Justia Law

The Internal Revenue Service notified petitioner-appellant James Cropper of its intent to collect unpaid taxes by levying his property. Cropper requested a collection due process (CDP) hearing with the IRS Office of Appeals. The Office of Appeals determined that the IRS could proceed with the proposed levy. Cropper sought judicial review, and the United States Tax Court sustained the Office of Appeals’ determination. Because the Tenth Circuit agreed with the Tax Court that the Office of Appeals didn’t abuse its discretion in determining that the IRS could proceed with the levy, it affirmed. View "Cropper v. CIR" on Justia Law

After the Commissioner denied Kimberly-Clark's corresponding refund claims that accompanied amended corporate franchise tax returns, Kimberly-Clark appealed to the tax court. Kimberly-Clark argued that its refund claims were allowable because the Legislature’s enactment of the Multistate Tax Commission’s apportionment formula was a contractual obligation that was unconstitutionally impaired when the 1987 Legislature repealed the provisions that authorized the use of that formula. The Minnesota Tax Court concluded that the Legislature’s 1987 repeal of the apportionment formula was constitutional and therefore the Commissioner properly denied Kimberly Clark’s refund claims. Kimberly-Clark petitioned for review. The court concluded that the Legislature made no unmistakable commitment in 1983 when it enacted Multistate Tax Compact, Minn. Stat. 290.171 that was impaired when the Legislature later repealed portions of that statute. Accordingly, the court affirmed the judgment. View "Kimberly-Clark Corp. Commissioner" on Justia Law

Plaintiffs Citibank (South Dakota), N.A. (lender) and Sears, Roebuck and Co. (retailer) appealed a superior court decision affirming the determination of the Vermont Department of Taxes (Department) that the parties, who had partnered to operate a private label credit card program through retailers’ stores, were not entitled to sales tax refunds related to bad debts. The Department denied lender’s refund requests because it was not a registered vendor under Vermont law that remitted the sales tax it sought to recover, and denied retailer’s deductions because it did not incur the bad debt at issue. On appeal, plaintiffs argued that because they acted in combination to facilitate the sales giving rise to the bad debts, they were not barred from obtaining relief. Finding no reversible error, the Vermont Supreme Court affirmed. View "Citibank (South Dakota), N.A. v. Dept. of Taxes" on Justia Law

Southwest Royalties, Inc., an oil and gas exploration company, filed a tax refund claim with the Comptroller, arguing that it was entitled to a tax exemption for some of its equipment related to oil and gas production operations such as casing, tubing, and pumps, together with associated services. The Comptroller denied relief. Southwest subsequently sued the Comptroller and the Attorney General, asserting that the equipment for which it sought refunds was used in separating oil, gas, and associated substances (collectively, hydrocarbons) into their different components. The trial court rendered judgment for the State, concluding that Southwest failed to meet its burden of proving that the exemption applied. The Supreme Court affirmed, holding that Southwest was not entitled to an exemption from paying sales taxes on purchases of the equipment because it did not prove that the equipment for which it sought a tax exemption was used in “actual manufacturing, processing, or fabricating” of hydrocarbons within the meaning of Tex. Tax Code Ann. 151.318(2), (5), or (10). View "Southwest Royalties, Inc. v. Hegar" on Justia Law

The Bickarts prepared and filed an income tax return containing false income and withholding amounts, supported by fabricated 1099‐OID forms, appearing to come from major financial institutions. The IRS paid a claimed refund of $115,412. Their legitimate refund would have been $263. The IRS discovered the fraud and sent a bill for $217,923. For years, the Bickarts engaged in obstructive conduct, sending a 1040‐V payment coupon and continuing to insist that the bill had been paid. They made baseless accusations against IRS agents. They were convicted of conspiring to file and filing a false claim to defraud the government, 18 U.S.C. 286 and 287. The Bickarts represented themselves at trial, asserting “sovereign citizen” claims and making nonsensical accusations. The PSR applied a two‐level enhancement for sophisticated means based on the fictitious Forms 1099‐OID and a two‐level enhancement for obstruction of justice, resulting in a guidelines imprisonment range of 33-41 months. Neither objected to the calculations. The court sentenced each defendant to 24 months in prison. Defendants objected to supervised release conditions requiring them to notify third parties of risks related to their criminal history when directed by the probation office. The court modified it to require the probation office to seek court approval. They also objected to the condition permitting a probation officer to visit them at home or at work at any reasonable time. The court overruled the objection. The Seventh Circuit vacated the third‐party notification condition, but otherwise affirmed the remaining conditions of supervised release and sentence. View "United States v. Bickart" on Justia Law

James and Tina Renacci filed a joint Ohio tax return for tax year 2000 without reporting and paying Ohio individual income tax on amounts earned by a trust (Trust) that owned shares of three Subchapter S corporations. In 2003, the tax commissioner assessed the Renaccis in relation to the unreported S-corporation income. The Renaccis paid all amounts demanded by the state and then filed a refund claim for the double-interest penalty amount. The tax commissioner denied the refund claim. The Board of Tax Appeals affirmed the denial of penalty remission. The Supreme Court reversed, holding that the tax commissioner, under the circumstances of this case, abused his discretion in denying the refund request. Remanded with instructions that the penalty be refunded. View "Renacci v. Testa" on Justia Law

Epic Aviation, LLC, a vendor of jet fuel, sold jet fuel to AirNet Systems, Inc., collected sales tax on it, and remitted the tax to the state. Epic, on behalf of AirNet, sought a refund of sales tax paid by AirNet on its purchases of jet fuel from Epic from January 1, 2006 through April 30, 2009. The tax commissioner denied the claim for refund. The Board of Tax Appeals (BTA) affirmed. Epic appealed, arguing that AirNet’s jet fuel purchases were exempt from sales tax because AirNet purchased the fuel intending to use the fuel “directly in the rendition of a public utility service” under Ohio Rev. Code 5739.02(B)(42)(a). The tax commissioner denied the exemption, finding that the business of AirNet, which does not hold a certificate of public convenience and necessity from the federal government, was not sufficiently regulated to qualify as a “public utility service.” The Supreme Court vacated the BTA’s decision and remanded, holding that Epic should have an opportunity to present evidence to establish the portion of the jet fuel purchased by AirNet that is exempt from taxation under the common-carrier standard as clarified in this opinion. View "Epic Aviation, LLC v. Testa" on Justia Law

For tax years 2002 through 2007, Appellants filed no Ohio tax returns, contending that income was earned outside Ohio. The tax commissioner assessed Ohio individual income tax against Appellants for the tax years at issue but initially failed to give notice of his reliance on the unrebutted presumption that Appellants were, in fact, Ohio residents and domiciliaries. Appellants challenged the commissioner’s assessment. The Board of Tax Appeals affirmed, concluding that Appellants failed to provide sufficient evidence to demonstrate an error in the commission’s final determination. The Supreme Court affirmed, holding (1) all income of Ohio residents is taxable, regardless of where the income is earned or received; and (2) Appellants failed to prove that they do not have to pay the amounts assessed, despite the tax commissioner’s failure to give notice of his reliance on the presumption of Ohio residency. View "Krehnbrink v. Testa" on Justia Law

After the IRS assessed Trust Fund Recovery Penalty (“TFRP”) taxes against Ashley Scott for quarters covering a certain period, she filed suit seeking a refund of the $300 she paid for taxes owed and seeking an adjudication that she was not responsible or if she were deemed the responsible person, contribution from other responsible persons. Scott worked for her father’s business beginning shortly after her graduation from high school in 1995 until its closing in 2008. Within the company, Scott’s role was very limited. She did not make financial decisions or authorize the payment of any bills to vendors or creditors; she did not open or close bank accounts, or otherwise perform banking functions; she did not guarantee or co-sign loans; and she did not hire or fire employees. She wrote checks when directed to by her father, to buy office supplies, or to give herself advances on her salary. Principally at issue on appeal is whether Scott is a “responsible person” under 26 U.S.C. 6672. The district court granted partial summary judgment for the Government, holding that Scott was a responsible person. The court held that this case is too close to be decided on summary judgment where there are genuine issues of material fact relevant to whether Scott was a responsible person under section 6672. Therefore, the court vacated and remanded as to this issue. The court rejected Scott's arguments as to the willfulness issue and affirmed as to this issue. View "Scott v. US Dept. of Treasury" on Justia Law