This case involved shareholders who owned stock in a C Corporation, which in turn held appreciated property. Commissioner appealed the district court's holding that Diebold could not be held liable as a transferee of a transferee under 26 U.S.C. 6901. The court concluded that the standard of review for mixed questions of law and fact in a case on review from the Tax Court was the same as that for a case on review after a bench trial from the district court: de novo to the extent that the alleged error was in the misunderstanding of a legal standard and clear error to the extent the alleged error was in a factual determination. On the merits, the court held that the two requirements of 26 U.S.C. 6901 were separate and independent inquiries, one procedural and governed by federal law, and the other substantive and governed by state law; under the applicable state statute, the series of transactions at issue collapsed based upon the constructive knowledge of the parties involved; and the court vacated the Tax Court's decision and remanded for further proceedings. View "Diebold Foundation, Inc. v. Commissioner of Internal Revenue" on Justia Law

At issue here was whether the sale of an aircraft and subsequent purchase of another from different entities can be considered a "trade-in" for purposes of the "taken in trade" tax exemption under Mo. Rev. Stat. 144.025 when an intermediary is used to facilitate the transaction. Here, Taxpayer purchased a 525B Cessna aircraft from Cessna Aicraft Company for $7.2 million. Taxpayer subsequently sold a 525A Cessna aircraft to C.B. Aviation for $4.7 million. Taxpayer used an intermediary in the sale. Taxpayer reported $2.5 million - the difference between the purchase price of the 525B aircraft and the sale price of the 525A aircraft - on its tax return. Taxpayer claimed it was entitled to a $4.7 million credit under section 144.025. The director of revenue determined Taxpayer was not entitled to the trade-in credit. The Supreme Court affirmed, holding (1) to receive a tax exemption under section 144.025, the taxpayer must demonstrate that its relinquished property was "taken in trade" for the acquired property; and (2) because the use of an intermediary did not transform the separate sale and purchase transactions into one trade-in transaction, Taxpayer could not claim a trade-in exemption. View "Loren Cook Co. v. Dir. of Revenue" on Justia Law

After the Department of Taxation denied Respondent's claim for a refund of overpaid taxes, Respondent appealed. The matter reached the Supreme Court, which concluded that Respondent was entitled to a tax refund. Respondent then filed a motion for judgment on the refund, arguing that it was entitled to pre- and post-judgment interest. The district court granted Respondent's request for pre- and post-judgment interest. The Supreme Court affirmed, holding (1) Respondent did not waive its right to seek interest by failing to demand interest in its initial tax refund claim; and (2) the Department may not withhold interest on tax refunds when it has failed to timely make a determination under Nev. Rev. Stat. 372.665 whether Respondent's overpayment of taxes had been made intentionally or by reason of carelessness. View "State Dep't of Taxation v. Masco Builder Cabinet Group" on Justia Law

The issue on appeal before the Supreme Court was whether the appellate court in "Georgia Dept. of Revenue v. Moore," (730 SE2d 671 (2012)) correctly determined that, once the Georgia Department of Revenue settles a refund action with one responsible party against whom unpaid sales taxes were assessed, the Department was thereafter precluded by the voluntary payment doctrine from attempting collection of any amount still owing from a second responsible party. The Supreme Court found that the Court of Appeals' reasoning in that case was incorrect, and therefore the Court remanded the case for further consideration. View "Georgia Dept. of Revenue v. Moore" on Justia Law

Plaintiff filed suit against the government, seeking a refund of payments on a federal withholding tax penalty assessed against her under 26 U.S.C. 6672. The government counterclaimed against plaintiff and her husband to reduce to judgment the remaining balance of the trust fund recovery penalties assessed against them. The district court granted summary judgment to the government. The court affirmed the district court's grant of summary judgment against the husband individually where he did not provide a basis of law for his contention that the assessment of the 100% penalty against him was not made within the limitation period set forth in section 6672; affirmed the district court's grant of summary judgment against plaintiff because the undisputed record showed that she was properly liable for the 100% penalty where she was a "responsible person" under section 6672 during the relevant tax periods and where she "willfully" failed to see that the withholding taxes were paid; and affirmed the district court's determination of the amounts of the respective tax liabilities under section 6672. View "Johnson v. United States" on Justia Law

At issue in this case was a Project that provided for the design and construction of a new Midtown Tunnel. The Commonwealth Transportation Board affirmed the Project and specifically approved and ratified the imposition and collection of tolls on the Project as contemplated by a Comprehensive Agreement entered into by Virginia Department of Transportation (VDOT) and Elizabeth River Crossings OpCo, LLC (ERC). Plaintiff and other individuals filed a complaint against ERC and VDOT, alleging, inter alia, that the General Assembly, through its enactment of the Public-Private Transportation Act (PPTA), unconstitutionally delegated its power of taxation to VDOT and ERC in violation of the Virginia Constitution. The circuit court concluded that the General Assembly exceeded its authority in this case. The Supreme Court reversed, holding (1) the Project tolls were user fees and not taxes, and therefore, the General Assembly did not delegate its power of taxation to agencies such as VDOT in violation of the Virginia Constitution; (2) the General Assembly properly delegated to VDOT and ERC the legislative power to impose and set the rates of user fees in the form of tolls under the terms of the PPTA; and (3) the Comprehensive Agreement did not abridge the Commonwealth's police power. View "Elizabeth River Crossings OpCo, LLC v. Meeks" on Justia Law

The issue before the Supreme Court in this appeal was whether certain property in Cumberland County, which was owned by the City of Philadelphia as trustee of the Stephen Girard Trust and leased by the Board of Directors of City Trusts to the Pennsylvania Office of Attorney General, was subject to local real estate taxation in Cumberland County. The trial court held that the property was both immune and exempt from local real estate taxation. The Commonwealth Court reversed. After its review, the Supreme Court reversed the Commonwealth Court and reinstated the trial court’s order on grounds of tax immunity. View "City of Philadelphia v. Cumberland Cty Brd Assess Appeals" on Justia Law

Five income tax assessments were levied against Appellant for the tax years 2003-2007 for Appellant's failure to file returns. Appellant filed reassessment petitions, which the tax commissioner denied. The Board of Tax Appeals (BTA) dismissed Appellant's appeal, concluding that it lacked jurisdiction to address the errors Appellant specified in his notices of appeal because those errors had not been raised before the tax commissioner. In so concluding, the BTA rejected another jurisdictional argument raised by the commissioner, namely, that because Appellant had not paid the assessment, the tax commissioner had lacked jurisdiction to hear Appellant's reassessment petitions. The BTA concluded, rather, that the prepayment provision of Ohio Rev. Code 5747.13(E)(3) was triggered by a failure to file tax returns and that Appellant had in fact filed returns for the tax years at issue. The Supreme Court reversed the BTA's ruling that the prepayment requirement did not apply in this case, vacated the remainder of the BTA's decision, and remanded with instructions that the reassessment petitions be dismissed for lack of prepayment. View "Abraitis v. Testa" on Justia Law

Defendants, an attorney and a law firm, structured a tax-deferred exchange for Plaintiffs, a husband and wife and the cattle ranch they owned. It was later determined that the exchange did not qualify for deferred tax treatment under 26 U.S.C. 1031, resulting in significant tax liability for Plaintiffs. Defendants filed an action against Defendants for professional negligence, breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and misrepresentation. The district court granted summary judgment to Defendants on all claims on grounds that Plaintiffs' claims were time barred. The Supreme Court reversed, holding (1) Plaintiffs' tort claims were timely filed, and the issue of whether Plaintiffs' timely filed their misrepresentation claim was a question of material fact to be resolved by a jury; (2) Plaintiffs properly stated a claim for breach of contract and the claim was not time barred; and (3) the district court erred in granting Defendants a protection order to prevent discovery of alleged work product and attorney-client communications, as further analysis and fact finding were necessary to determine which documents were discoverable and which qualified for work product or attorney-client protection. Remanded. View "Draggin' Y Cattle Co., Inc. v. Addink" on Justia Law

Tesoro Corporation challenged its income taxes assessed for 1994 through 1998. The state Department of Revenue (DOR) calculated Tesoro’s Alaska income by applying a three-factor apportionment formula to Tesoro’s worldwide income, including that of its non-Alaskan subsidiaries. An administrative law judge ruled Tesoro was a unitary business that could be subject to formula apportionment, and that DOR could permissibly assess penalties against Tesoro. Tesoro appealed to the superior court, which affirmed. On appeal to the Supreme Court, Tesoro argued that only the income of its Alaska-based subsidiaries should have been subject to taxation in Alaska because Alaska’s tax scheme violates the Due Process and Interstate Commerce Clauses of the United States Constitution. Because Tesoro’s business was unitary, the Supreme Court rejected Tesoro’s challenge to the constitutionality of taxing all of its income under formula apportionment. Because Tesoro lacked standing to challenge the formula’s constitutionality, the Court did not reach the internal consistency issue Tesoro raised. Furthermore, the Court concluded that DOR permissibly imposed penalties on Tesoro. Therefore the Court affirmed the superior court decision that affirmed the administrative law judge’s decision and order. View "Tesoro Corporation v. Alaska Dept. of Revenue" on Justia Law