The Tulsa County Assessor's office assessed ad valorem taxes on the Shadybrook Apartment Complex for the years 2004, 2005, and 2006. Shadybrook, under protest, timely paid the taxes each year, but appealed the Assessor's valuation to the Tulsa County Board of Tax Roll Corrections and the Tulsa County Board of Equalization. After receiving unfavorable decisions, Shadybrook appealed to the district court. The trial court granted summary judgment in favor of Shadybrook, determining that Shadybrook qualified for an exemption from ad valorem taxation pursuant to the Oklahoma Constitution, Article 10, sec. 6A. The Assessor appealed. On the first appeal in this case, the appellate court upheld the trial court's ruling in part but reversed and remanded with instructions to the trial court to determine whether Shadybrook's use of the property was for charitable purposes under Article 10, sec. 6A so as to overcome the Supreme Court's ruling in "London Square Village v. Oklahoma County Equalization and Excise Board." Neither party petitioned the Supreme Court for certiorari based on that opinion. On remand, the trial court found in favor of Shadybrook and the Assessor appealed. The Supreme Court retained the appeal. After further review, the Supreme Court held that Shadybrook's operation of the low-income housing complex was a charitable use under the constitutional ad valorem tax exemption in Article 10, sec. 6A of the Oklahoma Constitution. The statutory language in 68 O.S. 2004 sec. 2887(8)(a)(2)(b) excluding property funded with proceeds from the sale of federally tax-exempt bonds from ad valorem exemption is unconstitutional. The Court overruled "London Square Village." View "AOF/Shadybrook Affordable Housing Corp. v. Yazel" on Justia Law

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the Tax Tribunal has the authority to reduce an unconstitutional increase in the taxable value of property when the erroneous taxable value was not challenged in the year of the increase. Upon review, the Supreme Court held that the Tax Tribunal does have the authority to reduce an unconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year. "The Tax Tribunal Act sets forth the Tax Tribunal's jurisdiction[;] once [. . .] properly invoked, the Tax Tribunal possesses the same powers and duties as those assigned to a March board of review under the GPTA, including the duty to adjust erroneous taxable values to bring the current tax rolls into compliance with the GPTA." Because the Court of Appeals erroneously held that the Tax Tribunal did not have jurisdiction to review taxable values in years not under appeal, the Supreme Court reversed the Court of Appeals' judgment and remanded the case back to that Court to consider Northville Township's remaining issues on appeal regarding the Tax Tribunal's valuation of the properties. View "Toll Northville Limited Partnership v. Township of Northville" on Justia Law

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the tax assessor's failure to adjust the taxable value of a parcel of real property in the year immediately following its transfer precluded a March board of review from adjusting the taxable value in a later year. Upon review, the Court held that the failure to adjust the taxable value in the year immediately following the transfer produced an erroneous taxable value because the taxable value was not in compliance with the GPTA. Further, the GPTA did not preclude a March board of review from correcting an erroneous taxable value that resulted from the failure of an assessor to adjust a property's taxable value in the year immediately following its transfer. Accordingly, the Court also held that a March board of review may adjust the erroneous taxable value in a subsequent year in order to bring the current taxable value into compliance with the GPTA. The Court of Appeals held that the error in this case could not be remedied and, therefore, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the Michigan Tax Tribunal's decision affirming the March board of review's correction of the tax rolls to reflect the properly adjusted taxable values. View "Michigan Properties, LLC v. Meridian Twp" on Justia Law

The district court dissolved the marriage of Jennifer Dalbey, Appellant, and Matthew Bock. At issue on appeal was whether a trial court in a martial dissolution action has the discretion to order the parties to file a joint income tax return. The court of appeals affirmed the trial court's order requiring the parties to file a joint tax return, concluding that trial courts do have such discretion. The Supreme Court reversed, holding that because a trial court can equitably adjust its division of the marital estate to account for a spouse's unreasonable refusal to file a joint return, resort to a coercive remedy that carries potential liability is unnecessary. Remanded. View "Bock v. Dalbey" on Justia Law

Normally, if a partner contributes property, his basis in the partnership increases, and, when the partnership assumes a partner’s liability, his basis decreases. A Son-of-BOSS transaction recognizes acquisition (here, short-sale proceeds) and disregards acquisition of offsetting liability (obligation to close out the short-sale), to generate tax loss or reduce gain from sale of an asset. In their first such transaction, plaintiffs used partnerships to convert $66 million in taxable gain anticipated from stock sales into capital losses. Their partnership interests were held by tax-exempt charitable remainder unitrusts at the time of sale so that gain would escape taxation. The CRUTs terminated thereafter and assets were distributed to plaintiffs, purportedly tax free. The IRS determined that transfers to the CRUTs were shams to be disregarded; imposed basis and capital gain/loss adjustments, and alternative penalties; and asserted that the transactions did not increase amounts at risk under I.R.C. 465. Plaintiffs conceded capital gain and loss adjustments, but otherwise challenged the determinations. The Claims Court dismissed the determination that trust transfers were shams, believing it lacked jurisdiction; entered summary judgment in favor of plaintiffs on the ground that their concession to adjustments rendered valuation misstatement penalties moot; granted the government summary judgment on penalties for negligence, substantial under-statement, and failure to act in good faith; and imposed a penalty. The Federal Circuit reversed the dismissal, vacated summary judgment for plaintiff, and held that plaintiffs’ appeal was premature. View "Alpha I, L.P. v. United States" on Justia Law

Taxpayer appealed a decision of the Tax Court that disallowed her deduction for donating a "facade conservation easement" to the National Architectural Trust on the ground that there was no "qualified appraisal" within the meaning of Treasury Regulation 1.170A-13(c)(3). The court concluded that the Trust's agreement to accept the gift of the easement was not a transfer of anything of value to the taxpayer and thus did not constitute a quid pro quo for the gift of the cash. The court also concluded that the appraisal satisfied the regulatory specifications and vacated the Tax Court's judgment, remanding for further proceedings. View "Scheidelman v. Commissioner of Internal Revenue" on Justia Law

Defendant owned three restaurants, kept two sets of books, and underreported gross receipts. The government discovered the fraud when he listed a restaurant for sale. A fact sheet prepared by the broker calculated average monthly gross receipts at $170,000 and an average yearly operating profit of $554,840. IRS undercover agents posed as buyers. During meetings, defendant explained how he tracked actual receipts. Agents executed a warrant at the restaurants and seized weekly summary sheets and envelopes detailing nightly sales and cash payouts. The IRS concluded that additional taxes due on defendant’s personal tax returns were: $226,752 for 2001, $244,799 for 2002, $213,186 for 2003, and $152,987 for 2004, for a total tax loss of $837,724. Charged with eight counts, defendant pled guilty to four counts of making false statements in a tax return, but claimed that the government’s figure did not account for deductible expenses, such as costs of DJ/promoters, cash wages, complimentary drinks and food, and transfers to his other restaurants for supplies. He claimed the IRS lost $22,292.27. The district court held that it could not consider unclaimed deductions and imposed a sentence of 24 months (bottom of the guideline range) and ordered restitution in the amount of $837,724. The Seventh Circuit affirmed. View "United States v. Psiho" on Justia Law

Plaintiff Lebanon Hangar Associates, Ltd. (LHA) appealed a superior court decision that vacated an arbitrator's decision that it was not required to pay taxes under a lease agreement with Defendant City of Lebanon. LHA leased property at the City's airport. Although the terms of the lease require LHA to pay "taxes . . . lawfully levied or assessed, "between 1991 and the first half of 2006, the City did not tax LHA on the value of the land itself, limiting its assessment of taxes to the value of the buildings. In October 2006, the City assessed a tax upon the value of the land, thereby increasing the total valuation subject to taxation. After unsuccessfully requesting an abatement from the City, LHA petitioned the superior court, pursuant to RSA 76:17 (2003), to rule that the leasehold is not taxable. LHA subsequently moved to amend its petition to add a claim that the City breached the lease by demanding the payment of taxes. In response, the City invoked an arbitration clause in the lease. In April 2009, the arbitrator issued the first of two decisions, concluding that, while the written lease unambiguously allows the City to assess a tax upon the value of LHA’s leased land, other evidence submitted by LHA could serve as the basis for reforming the lease based upon mutual mistake. At the next hearing, LHA asserted its reformation argument over the objections of the City, which contended that the arbitrator’s authority was limited to deciding the meaning of the four corners of the lease agreement. After reviewing the evidence, the arbitrator issued a second, and final, decision in March 2010, concluding that LHA "is not and has not been obligated to pay real estate taxes to the City" under the lease. The issue on appeal to the Supreme Court was whether the arbitrator exceeded the scope of his authority by reforming the lease based upon mutual mistake. Upon review, the Supreme Court agreed with LHA that the arbitrator did not exceed the scope of his authority in this case, and reversed the superior court's decision, and remanded the case for further proceedings. View "Lebanon Hangar Associates, Ltd. v. City of Lebanon " on Justia Law

The State of Nebraska Accountability and Disclosure Commission issued an advisory opinion answering the question of whether Omaha firefighters can engage in a campaign to raise funds for the Muscular Dystrophy Association (MDA) during on-duty time paid for with taxpayer funds or using city-owned uniforms and equipment. The Commission stated that such activities violated the Nebraska Political Accountability and Disclosure Act (NPADA). Appellants, the Nebraska Professional Firefighters Association, its president, and the MDA, filed an action against the Commission, asking the district court to declare the advisory opinion invalid. The district court dismissed the case, determining that it lacked subject matter jurisdiction to review a Commission advisory opinion. The court of appeals dismissed the appeal for lack of jurisdiction. The Supreme Court affirmed, holding that the district court correctly concluded that it lacked subject matter jurisdiction, and the court of appeals correctly dismissed the appeal. View "Engler v. State" on Justia Law

Jackson Ward Partners (JWP) owned real property in the City of Richmond. JWP filed an amended complaint in the circuit court for correction of erroneous tax assessments on the property for the tax years 2005-2008, claiming that the assessments were clearly erroneous and in excess of the fair market value. The circuit court held that JWP satisfied its burden of proving the City's assessments were erroneous and ordered the City to correct its assessments and issue refunds to JWP for taxes it overpaid based on the erroneous assessment, plus interest. The Supreme Court reversed, holding that JWP failed to prove the fair market value of the real property at issue. Remanded for entry of an order reinstating the City's tax assessments on the real property for the tax years in question. View "City of Richmond v. Jackson Ward Partners, L.P." on Justia Law