Plaintiffs appealed an order of the district court granting in part and denying in part the motion of defendant to dismiss the complaint for failure to state a claim. Plaintiffs contended that the IRS wrongfully withheld tax refunds to which plaintiffs were entitled as the result of the IRS's misinterpretation of contractual language in Offer-in-Compromise (OIC) agreements that plaintiffs entered into with the IRS. The principal issue on appeal was whether specialized tax terms in an OIC agreement derived their meaning from the Internal Revenue Code or from ordinary "plain English." The court held that, when used in IRS standard form documents, specialized tax terms such as "refund" and "overpayment" were interpreted in light of the Internal Revenue Code. Further, tax refunds made pursuant to the Economic Stimulus Act of 2008, I.R.C. 6428, related to the 2007 tax year, and so those refunds fell with the OIC agreements' temporal limitation. Finally, plaintiffs' agreement to forfeit their interest in "any" tax refund for the 2007 tax year encompassed anticipated as well as unanticipated tax refunds. Based on these holdings, the court concluded that the IRS correctly withheld the tax refunds at issue in this action from plaintiffs under the express terms of the OIC agreements. View "Sarmiento v. United States" on Justia Law

The Oklahoma Tax Commission assessed corporate income taxes against Vermont Corporation Scioto Insurance Company for 2001 through 2005, based on payments Scioto received from the use of Scioto's intellectual property by Wendy's restaurants in Oklahoma. In response, Scioto protested these assessments on the ground that it did not contract with the Wendy's restaurants in Oklahoma for use of the property in question and did not conduct any business whatsoever in Oklahoma. The Tax Commission denied Scioto's protest and the Court of Civil Appeals affirmed. The Supreme Court previously granted certiorari. Upon review, the Court vacated the Court of Civil Appeals opinion, reversed the Tax Commission's denial of Scioto's protest and remanded the case with instructions to sustain Scioto's protest. View "In re Income Tax Protest of Scioto Ins. Co." on Justia Law

Defendant appealed her conviction of one count of mail fraud and three counts of tax evasion for calendar years 1995-1997. On appeal, defendant contended that the trial evidence was insufficient to support her convictions and that the mail fraud and the tax evasion counts were improperly joined. The court agreed with the sufficiency challenges relating to the tax evasion counts for 1996 and 1997 and reversed her convictions on those counts. The court vacated defendant's convictions for mail fraud and tax evasion for 1995 on the ground that those counts were improperly joined, and remanded the case to the district court for further proceedings. View "United States v. Litwok" on Justia Law

Puerto Rico has classified Coors as a large brewer under its beer tax schedule, taxed at a higher rate than small brewers, including local brewer Cervecería India. In 2006, Coors brought suit challenging this differential treatment under the dormant Commerce Clause. The district court originally dismissed the case on comity grounds, but the First Circuit reversed. While remand was pending in 2010, the Supreme Court decided Levin v. Commerce Energy, Inc., which expressly abrogated the First Circuit’s 2009 decision. The district court then dismissed on grounds of comity. The First Circuit affirmed. Puerto Rico’s Secretary of the Treasury did not consent to litigate in federal court and Puerto Rico courts provide an adequate state forum for adjudication of federal constitutional claims. View "Coors Brewing Co. v. Mendez-Torres" on Justia Law

These consolidated cases sought judicial review of notices of final partnership administrative adjustment (FPAA) issued to Bemont and BPB. Following the review of the district court, the government appealed the ruling on the partnerships' motion for partial summary judgment disallowing the 40% valuation misstatement penalty, and the ruling post trial holding that the FPAA issued to Bemont for the 2001 tax year was time-barred. The partnerships appealed the district court's judgment upholding the imposition of the 20% substantial understatement and negligence penalties. The court reversed the judgment of the district court that the FPAA as to the 2001 tax year was untimely; affirmed the judgment of the district court in all other respects including disallowing the 40% valuation misstatement penalty and upholding the 20% negligence penalty for both 2001 and 2002. View "Bemont Investments, L.L.C., et al. v. United States" on Justia Law

Prestonsburg Industrial Corporation (PIC) was founded in 1968 as a private, nonprofit corporation to attract business and industry to the City for economic development. To accomplish this goal, PIC would buy property, make improvements, then sell the property to various businesses. The profits were rolled back into PIC for additional purchases and improvements. In 2001, PIC purchased a parcel from the City. The county property valuation administrator then sought to tax the property. PIC claimed it was tax exempt and filed for a tax exemption from the Kentucky Revenue Cabinet. Revenue denied the application. The board of tax appeals affirmed, concluding that the property was not tax exempt under section 170 of the Kentucky Constitution, which exempts institutions of purely public charity from paying ad valorem taxes. The circuit court reversed and found the property tax exempt. The court of appeals affirmed, concluding that PIC was a purely charitable organization as defined under section 170 and was thus exempt from taxation. The Supreme Court reversed, holding that the evidence did not establish that PIC was a purely public charity or that its property was employed for a purely charitable purpose. Remanded. View "Hancock v. Prestonsburg Indus. Corp." on Justia Law

The Supreme Court received a certified question from the Ninth Circuit Court of Appeals. The issue centered on whether under RCW 82.04.500 a seller may upon disclosure, recoup its business and occupation (B&O) tax by collecting a surcharge to recover gross receipts taxes in addition to its monthly service fee. The matter stems from Plaintiff-Appellant James Bowden's purchase of three cell phones and a monthly service plan for each phone at a kiosk. The phone company's monthly service fee did not include Washington's B&O tax. However, the tax was listed as a "State B and O Surcharge" on Plaintiff's monthly bills, for which he was charged various amounts for each of the phones. Upon review, the Supreme Court concluded that the phone company's monthly service fee, the sales price of its service contract, did not include the B&O surcharge. Rather, on the Agreement, the surcharge was listed separately under the "Regulatory Recovery Fee" provision described as a gross receipts surcharge. Further, the company's billing statements listed the surcharge separately like it was a sales tax, and both the sales tax and B&O fee were added on to the service fee. The Court therefore answered "no": even if disclosed under RCW 82.04-500, a seller is prohibited from recouping its B&O taxes by collecting a surcharge in addition to its monthly service fee. View "Peck v. AT&T Mobility" on Justia Law

Petitioner-Appellant Philip Hart appealed two State Tax Commission Notice of Deficiency determinations to the Board of Tax Appeals (BTA). The BTA found Petitioner's appeal untimely and dismissed it. Petitioner then appealed to the district court who likewise found the appeal untimely and dismissed the case for lack of jurisdiction. Upon review, the Supreme Court agreed with both the district court and the BTA, and dismissed Petitioner's appeal. View "Hart v. Idaho Tax Commission" on Justia Law

The Enterprise Zone Act, Gov. Code, 7070 et seq., was enacted "to stimulate business and industrial growth" in "areas within the state that are economically depressed due to a lack of a private sector." Among the incentives available to businesses that operated within an enterprise zone was a hiring tax credit in the amount of a percentage of the wages paid to a "qualified employee." Rev. & Tax. Code, 23622.7, subd. (a). The Franchise Tax Board conducted an audit and refused to accept some of the certifications that Dicon claimed for a hiring tax credit. The Board found that the documents Dicon produced to establish that workers were "qualified employees" were insufficient and denied the requested tax credit in part. The court reversed the appellate court's holding that a certification issued by a governmental agency for purposes of the hiring tax credit under section 23622.7 constituted "prima facie proof a worker is a 'qualified employee,'" which shifted to the Board the "burden of demonstrating an employee is not a qualified worker for which no voucher should have issued." In all other respects, the Board did not challenge the appellate court's judgment and the judgment was affirmed. View "Dicon Fiberoptics v. Franchise Tax Bd." on Justia Law

The issue before the Supreme Court concerned the validity of a single unified tax assessment of both a tract of land, and the buildings of a shopping center, movie theater, and restaurant located on the land. The land was owned by Appellant Tech One Associates, and the buildings and surrounding improvements to the land were constructed and owned by a second entity, "Terra Century Associates" (Lessee). Upon review, Appellees the Board of Property Assessment Appeals and Review of Allegheny County, the Borough of West Mifflin, and the West Mifflin Area School District correctly treated the land, the buildings, and the improvements to the land as real estate subject to taxation under Section 201(a) of the Commonwealth's General County Assessment Law. Further, the Court upheld the rulings of the lower courts that its previous decision in "In re Appeal of Marple Springfield Center, Inc," (607 A.2d 708 (1992)) did not preclude the valuation of real estate owned as a leasehold interest, and that the market value for the land, buildings, and improvements determined at trial accurately reflected the "economic reality" of the impact of the long-term lease between Appellant and its lessee. View "Tech One Assoc. v. Bd. of Prop. Assessment Appeal & Review" on Justia Law