Plaintiff, an attorney who represented Steven Cheung and Linda Su Cheung, as well as two companies allegedly owned by the Cheungs, asked for documents on which certain tax assessments were based. At issue was whether plaintiff was entitled under the Freedom of Information Act (FOIA), 5 U.S.C. 552, to disclosure of the tax-related documents held by the IRS. The government resisted the disclosure of the documents because disclosure would "seriously impair Federal tax administration" within the meaning of 26 U.S.C. 6103(e)(7) and Exemption 3 of FOIA, and "could reasonably be expected to interfere with enforcement proceedings" within the meaning of Exception 7(A) of FOIA. The government also contended under the fugitive entitlement doctrine that the Cheungs had no right to disclosure under FOIA, whether or not the documents qualified under FOIA. The court affirmed the district court's holding that the documents were protected under Exemptions 3 and 7(A) and did not reach the fugitive disentitlement question. View "Shannahan v. Internal Revenue Service" on Justia Law

The Indiana Department of State Revenue conducted an audit of a taxpayer corporation, concluded that the corporation's 2003 tax return did not fairly represent its income from Indiana sources, and proposed an assessment of additional tax liability. On the corporation's appeal of the Department's final determination, the Indiana tax court granted the corporation's motion for summary judgment. The Supreme Court reversed, holding that the tax court incorrectly applied a combined scheme of tax statutes and trial rule requirements to the case before it. The Court concluded that the tax court required additional designated evidence, beyond the proposed assessment, in order for the Department to make a prima facie showing as to the absence of any issues of material fact under Ind. Trial R. 56(C). Remanded. View "Ind. Dep't of State Revenue v. Rent-A-Center East, Inc." on Justia Law

Delta sought review of the First District's reversal of summary judgment voiding a tax deed and quieting title to certain real property in Delta. The court concluded that the First District improperly applied the law-of-the-case doctrine and that the validity of the tax deed in this case should be determined by applying Jones v. Flowers and Vosilla v. Rosado. The court further held that because the Clerk failed to take reasonable, additional steps to provide notice to Delta upon learning that the notice sent by certified mail was not successfully delivered, the tax deed was invalid. Therefore, the court quashed the First District's decision and remanded with instructions that the trial court's grant of summary judgment in favor of Delta be affirmed. View "Delta Property Mgmt., etc. v. Profile Investments, Inc., et al." on Justia Law

Casey's Marketing Company was a convenience store engaged in the retail sale of gas, grocery items, nonfood items, and prepared foods. Aquila Foreign Qualifications Corporation was a utility that sold electricity to Casey's. Casey's filed a refund claim with the director of revenue for one month's tax paid for a portion of electricity Aquila sold to two Casey's locations. The director denied the claim. At Casey's request, Aquila challenged the director's final decision. The administrative hearing commission reversed, holding that Mo. Rev. Stat. 144.054.2, which provides a tax exemption for the "processing" of products," exempted Casey's food preparation operations. The Supreme Court reversed the commission, holding (1) the preparation of food for retail consumption is not "processing" within the meaning of section 144.054.2; and (2) therefore, Casey was not entitled to a sales and use tax exemption on electricity it purchased to power its food preparation operations. View "Aquila Foreign Qualifications Corp. v. Dir. of Revenue" on Justia Law

The debtor filed a voluntary bankruptcy petition and her Chapter 13 plan. A few weeks later, she filed her Michigan state income tax return, showing that she owed $4,900 for the 2008 tax year. She did not make payment, but later filed a proof-of-claim on behalf of the Michigan Department of Treasury, which meant that the tax debt would be paid through her Chapter 13 plan. Treasury objected, arguing that this was a post-petition claim under 11 U.S.C. 1305, which gives only a creditor the option of filing; debtor responded that the claim was permitted under section 501(c). The bankruptcy court overruled the objection; the district court affirmed The Sixth Circuit affirmed. The tax debt is entitled to priority under section 507(a)(8), (i) and (iii), so the post-petition protective claim on behalf of Treasury is treated under section 502(i) as a prepetition claim. A debtor is permitted to file a prepetition claim on behalf of a creditor that fails to timely file.View "In re: Hight" on Justia Law

This case arose from two civil investigative demands (CIDs) issued to the University of Virginia and the Rector and Visitors of the University of Virginia (collectively, UVA) by the attorney general, pursuant to the Virginia Fraud Against Taxpayers Act (FATA). The CIDs sought information relating to the research of a climate scientist that had taught at UVA, received a series of grants to fund his research, and, with other climate scientists, had allegedly falsified data to indicate an upturn in the earth's surface temperatures due to the use of fossil fuels. UVA petitioned the circuit court to set aside the CIDs, arguing that the attorney general had no statutory authority to serve CIDs upon agencies of the Commonwealth and that the CIDs were defective because they failed to state the nature of the conduct alleged. The circuit court granted the petition and set aside the CIDs, without prejudice. The Supreme Court affirmed the judgment of the circuit court, but, unlike the circuit court, set aside the CIDs with prejudice, holding that the University of Virginia, as an agency of the Commonwealth, did not constitute a "person" under the FATA and therefore could not be the proper subject of a CID. View "Cuccinelli v. Rector & Visitors of Univ. of Va." on Justia Law

SunTrust Bank and Richmond Redevelopment and Housing Authority (RRHA) owned two properties in the City of Richmond as tenants in common. The RRHA was exempt from taxation but SunTrust was not. In 2009, the City determined that SunTrust was liable not only for the taxes on its ownership interests, but also for the taxes on the RRHA's interests. The City accordingly corrected the assessments against SunTrust for 2006 through 2009 to reflect that it was liable for taxes on both its ownership interests and the RRHA's. SunTrust challenged the City's actions, and the circuit court ruled that the City had no authority to tax SunTrust for the RRHA's ownership interests in the properties. The Supreme Court affirmed, holding that the City had no authority pursuant to the parties' operating agreements, the state Constitution, or state law to tax SunTrust for the RRHA's ownership interests in the properties. View "City of Richmond v. SunTrust Bank" on Justia Law

LaFarge Corporation operated a cement manufacturing facility on a tract of property that included a contiguous limestone quarry on one side at which LaFarge used its Caterpillar equipment to load the raw material and haul it across the property to the hammermills that performed the initial step in the cement manufacturing process. LaFarge paid sales taxes to Martin Tractor Company on the purchase of repair parts for its loaders and haulers, but then unsuccessfully sought a refund of the sales taxes from the Kansas Department of Revenue. Ultimately, the court of tax appeals (COTA) determined that the equipment, and therefore the repair parts, was exempt under Kan. Stat. Ann. 79-3606(kk)(2)(D) as being an integral or essential part of the integrated production operation of the cement manufacturing facility. The Supreme Court affirmed COTA's refund of sales taxes, agreeing that the equipment was being primarily used in the cement manufacturing business and at the manufacturing facility was was therefore subject to the exemption. View "In re Tax Appeal of LaFarge Midwest" on Justia Law

Ocean Pines Association, a non-stock corporation, oversees a subdivision of more than thirty-five hundred acres in Berlin, Maryland. The Association was exempt from federal income taxation as an organization "not organized for profit but operated exclusively for the promotion of social welfare" pursuant to 26 U.S.C. 501(c)(4)(A). The Tax Court subsequently determined that the net income from two parking lots and a beach club owned by a tax-exempt association constituted "unrelated business taxable income." The association appealed. Because the income derived from the parking lots and beach club was not "substantially related" to the association's tax-exempt purpose, the court affirmed. View "Ocean Pines Assoc. v. Commissioner of IRS" on Justia Law

The Davises failed to pay the real estate tax for their property, resulting in a statutory tax. The Davises then filed a petition for bankruptcy, which was granted. Subsequently, the sheriff sold the tax lien. After the statutory time period that the Davises could redeem the property had passed and the property remained unredeemed, the tax lien purchaser received a tax deed conveying the Davises' property. The trial court set aside the tax deed, concluding that the tax lien sale should not have been held because the Davises had been in bankruptcy and because the sheriff did not give sufficient notice to the Davises of the tax delinquency, lien, and sale. The Supreme Court reversed, holding that the trial court erred (1) in considering issues relating to the sufficiency of the sheriff's service of the notices; (2) in considering the sheriff's pre-sale notices to the Davises, as only the post-sale notice to redeem is relevant in a lawsuit to set aside a tax deed; and (3) by granting judgment without making sufficient findings of fact and conclusions of law as to the effect the Davises' bankruptcy had on the tax lien. Remanded. View "Rebuild America, Inc. v. Davis" on Justia Law