Barrett, a financial planner, induced the plaintiffs, small New Jersey corporations and their owners, to adopt an employee welfare benefit plan known as the Employers Participating Insurance Cooperative (EPIC). EPIC was promoted as a multiple employer welfare benefit plan for which contributions were deductible under 26 U.S.C. 419A(f)(6), but in fact was a method of deferring compensation. After the Internal Revenue Service audited the plans and disallowed deductions claimed on federal income tax returns, plaintiffs sued Barrett and other entities involved in the scheme, asserting claims under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001-1461; the civil component of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. 1961-1968; and New Jersey statutory and common law. A jury found Barrett liable of common law breach of fiduciary duty, but not liable on the RICO claim. The district court held a bench trial on the ERISA claim and issued partial judgment for plaintiffs. The Third Circuit affirmed in part, but vacated holdings that deemed certain state law causes of action preempted by ERISA, found certain ERISA claims time-barred, and limited the jury‘s consideration of one RICO theory of recovery. View "Cappello v. Iola" on Justia Law

In 2000-2001Alioto spent several hundred thousand dollars of his own money on expenses relating to a new business (BRT) involving use of “celebrity talent” to create internet advertising. Alioto became involved in BRT after being approached by the actor, John Ratzenberger, and claims that he believed he would be reimbursed by Ratzenberger for funds expended on behalf of the business, but was never fully repaid. Alioto filed a Chapter 7 bankruptcy petition, listing $341,363 outstanding loans owed to him from BRT as part of his assets. Alioto sought to deduct the unreimbursed funds as losses for tax year 2005 and to carry forward some of these losses as deductions for tax years 2006 and 2007. The IRS denied the deductions and issued notices of deficiency. The Tax Court agreed. The Sixth Circuit affirmed, upholding determinations that any business losses occurred prior to 2005, 26 U.S.C. 165(a) and that the losses did not amount to theft under section 165 (e). View "Alioto v. Comm'r of Internal Revenue" on Justia Law

Taxpayer World Publications distributes a free weekly newspaper in central Vermont called The World. Once a month, the newspaper includes a coupon book, produced and printed by taxpayer, that features coupons for local businesses. The Commissioner of Taxes concluded that the coupon books are not "component parts" of the newspaper, and therefore the cost of printing the coupon books is "not exempt from sales and use tax." The superior court affirmed. World Publications appealed. Upon review, the Supreme Court affirmed too. View "World Publications, Inc. v. Vermont Department of Taxes" on Justia Law

Debtors voluntarily filed a joint Chapter 13 bankruptcy petition. At issue was whether social security benefits were included in a debtor's projected disposable income in the formulation of a Chapter 13 plan and the calculation of the future payments the debtor would be required to make to creditors. Because including social security income in projected disposable income would violate both the Bankruptcy Code and the Social Security Act, 42 U.S.C. 407, the court held that social security benefits were not included in a debtor's projected disposable income. The court also held that retention of exempt social security benefits alone was legally insufficient to support a finding of bad faith under the Bankruptcy Code. Accordingly, the court affirmed the judgment. View "Beaulieu, Jr. v. Ragos, et al" on Justia Law

A school district (District) obtained an in rem delinquent property tax judgment against an oil and gas lease that Respondent owned and operated. Respondent did not appeal, and the District foreclosed its judgment lien on the leasehold, taking ownership. The Railroad Commission ordered Respondent to plug a well on the lease. Respondent did not comply, and the Commission plugged the well and brought an enforcement action in court to recover the costs of the operation and the penalty. Respondent and the Commission settled. Respondent then sued the District, alleging in part that the District's actions had resulted in a taking of his property requiring compensation. The trial court dismissed Respondent's action for want of jurisdiction, but the court of appeals reversed and remanded with respect to the takings claim. The Supreme Court reversed and dismissed the case, holding that the trial court correctly dismissed Respondent's case, as Respondent did not assert on appeal that the District took his property without compensation. View "W. Hardin County Consol. Indep. Sch. Dist. v. Poole" on Justia Law

At issue in this case was whether taxpayers who were sued for nonpayment of property taxes lost their entitlement to contest liability based on non-ownership when the taxing authorities non-suited after the taxpayers paid the disputed taxes under protest. The taxing authorities filed a plea to the jurisdiction, asserting that the district court lacked jurisdiction because the taxpayers failed to exhaust administrative remedies as required by the Tax Code. The district court denied the plea. The court of appeals reversed and granted the plea. The Supreme Court reversed, holding that the taxpayers did not lose their entitlement to contest tax liability on the basis of non-ownership when the taxing units non-suited and the taxpayers were realigned as plaintiffs. View "Morris v. Houston Indep. Sch. Dist." on Justia Law

Since first imposing a franchise tax in 1893, the Legislature restructured it several times, drawing various distinctions among taxpayers with adjustments, deductions, and exemptions that became elaborate. Petitioner in this original proceeding contended that the franchise tax bore no reasonable relationship to its object, the value of the privilege of doing business in Texas, and therefore it violated the Texas Constitution's mandate that "taxation shall be equal and uniform," the Fourteenth Amendment's equal protection and due process guarantees, and the U.S. Constitution's Commerce Clause. The Supreme Court denied the petition, holding (1) Petitioner failed to establish that the franchise tax violates the Equal and Uniform Clause; (2) the failure of Petitioner's challenge based on the Equal and Uniform Clause foreclosed its equal protection challenge; (3) the franchise tax does not violate due process; and (4) the manufacturing rate does not discriminate against interstate commerce and is fairly related to the services provided by Texas. View "In re Nestle USA, Inc." on Justia Law

The issue before the Tenth Circuit Court of Appeals in this case concerned whether the amount of a federal tax refund equivalent to the "nonrefundable" portion of the child tax credit was exempt from a bankruptcy debtor's estate under Colorado law. The Bankruptcy Panel for the Tenth Circuit held that the disputed funds were exempt; upon review, the Tenth Circuit Court of Appeals disagreed and reversed, finding that the nonrefundable portion was "property" of the bankruptcy estate within the meaning of 11 U.S.C. 541(a). View "In re: Borgman, et al" on Justia Law

In these consolidated cases, Petitioners Mountain America, LLC, et al. (hereinafter "Mountain America") appealed from orders entered by the circuit court denying Mountain America's appeals from its ad valorem property tax assessments for tax years 2008 and 2009. In each case, the circuit court ruled that Mountain America's appeal was barred by res judicata because the Supreme Court had previously considered and decided Mountain America I, in which Mountain America unsuccessfully challenged its 2007 ad valorem property tax assessments regarding the same parcels of property as those whose assessments were contested in the 2008 and 2009 litigations. The Supreme Court reversed the circuit court's rulings in both cases, holding that the Court's decision in Mountain America I did not operate as a res judicata bar to preclude the instant litigation. Remanded for reinstatement of Mountain America's claims for relief from its 2008 and 2009 ad valorem property tax assessments and consideration of the merits thereof. View "Mountain Am., LLC v. Huffman" on Justia Law

Plaintiff, a credit union, commenced this declaratory judgment action against Defendants, the state department of taxation and finance, its commissioner, and the state. The credit union asserted it was not required to pay the mortgage recording tax (MRT) on mortgage obligations issued to members because (1) the Federal Credit Union Act (FCUA) exempts federal credit unions and their property from state taxation, and (2) as instrumentalities of the United States, federal credit unions are immune from state taxation under the Supremacy Clause. Supreme court granted Defendants' motion to dismiss the complaint, and the appellate division affirmed. The Court of Appeals affirmed, holding that, based on principles of statutory interpretation and the legislative history of the FCUA, federal credit unions are not exempt from the state's MRT. View "Hudson Valley Fed. Credit Union v. Dep't of Taxation & Fin." on Justia Law