In this federal estate tax refund action, the Marshal Naify Revocable Trust appealed the district court's decision granting the Government's motion for judgment on the pleadings pursuant to Rule 12(c). After Naify's death, the Estate deducted $62 million on its federal estate tax return for the estimated amount of California income that it might owe on the $660 million gain if Naify's California tax avoidance plan failed. The court affirmed the judgment and agreed with the district court that the settlement amount was dispositive because it "determine[d] as a factual matter how much the claim against the estate [was] worth and [was] the only moment at which the value of the claim [became] 'certain.'" View "Naify Revocable Trust, et al. v. United States" on Justia Law

Petitioner, a registered representative and principal with various brokerage firms over the years, sought review of a final order of the Commission, which concluded that he willfully failed to disclose the existence of certain tax liens filed against him. The Commission's conclusion that petitioner acted willfully, which followed his appeal of various determinations of the Financial Industry Regulatory Authority (FINRA) and its predecessor, the National Association of Securities Dealers (NASD), subjected him to statutory disqualification from the securities industry. The court concluded that there was substantial evidence supporting the SEC's factual finding that petitioner failed to disclose the liens on his Forms U-4 and that the liens were material. Moreover, the SEC did not abuse its discretion when it determined that petitioner's conduct constituted a willful violation of the securities provisions relating to applications and registration. Therefore, the court denied the petition and affirmed the Commission's order. View "Mathis v. U.S. Securities & Exchange Commission" on Justia Law

Petitioners and its affiliates, manufacturers and distributors of food and beverages in the United States, sought a declaration that the Texas franchise tax was unconstitutional, Tex. Tax Code 171.0001-.501, an injunction prohibiting its collection, and mandamus relief compelling the Comptroller to refund the taxes they paid from 2009 through 2011. Petitioners did not pay their taxes under protest or request a refund from the Comptroller, statutory requisites to taxpayers suits in the district court but not, relators contended, for suit in this court. The court disagreed and held that the statutory requisites were conditions on the legislative waiver of the State's immunity from suit. Accordingly, the court dismissed the case for want of jurisdiction. View "In re Nestle USA, Inc., Switchplace, LLC, and NSBMA, LP, Relators" on Justia Law

Loren Pourier, the owner of a corporation that operated a gas station on reservation land, brought an action against the state Department of Revenue and Regulation to protest a state motor-fuel tax imposed on the corporation. The Supreme Court held that the fuel tax was illegal in Pourier I. Pourier then filed a motion for costs and attorneys' fees. The circuit court granted the motion. The Department appealed, contending that the position it took in Pourier I was "substantially justified" under S.D. Codified Laws 10-59-34. The Supreme Court reversed after undertaking a three-pronged analysis, holding that the circuit court erred in finding the position the Department took in the Pourier litigation was not substantially justified and thus ordering the Department to pay Pourier's costs and attorneys' fees. View "Pourier v. S.D. Dep't of Revenue & Regulation" on Justia Law

The Commissioner appealed the decision of the Tax Court allowing taxpayers to apply the parsonage allowance income exclusion of Internal Revenue Code 107(2) to multiple houses. A divided Tax Court held that taxpayers were entitled to exclude from their income the parsonage allowance allocated to their second house under section 107(2). The court concluded that "a" maintained a singular connotation, especially when the context indicated a singular meaning as here, "a home." The Supreme Court stated that income exclusions should be "narrowly construed." In light of this directive, the court believed that it should construe any ambiguity in section 107(2) to favor a more expansive reading of the parsonage allowance income exclusion. Accordingly, the court reversed and remanded to the Tax Court for further proceedings. View "Commissioner of IRS v. Driscoll, et al." on Justia Law

Taxpayers purchased a three-acre lakefront property in Chenequa, Wisconsin, demolished the house and built another. They donated the house to the local fire department to be burned down in a firefighter training exercise and claimed a $76,000 charitable deduction on their 1998 tax return for the value of the house. The IRS disallowed the deduction. The decision was upheld by the Tax Court. The Seventh Circuit affirmed, finding that the taxpayers did not show a value for their donation that exceeded the substantial benefit they received in return. When a gift is conditional, the conditions must be taken into account in determining fair market value of the donated property. Proper consideration of the economic effect of the condition that the house be destroyed reduces fair market value of the gift so much that no net value is ever likely to be available for a deduction. View "Rolfs v. Comm'r of Internal Revenue" on Justia Law

In 2010, the Learning Community of Douglas and Sarpy Counties established a common levy for the general fund budgets of its eleven member school districts. After Sarpy County levied this tax on real property, three taxpayers brought an action in the district court seeking a declaration that the tax was unconstitutional. The Learning Community, each of its member school districts, and the Sarpy County treasurer were named defendants in the action. The district court declared the Learning Community's common levy was unconstitutional as a property tax for state purposes. The Learning Community and two of its member school districts appealed. The Supreme Court reversed, holding (1) Neb. Rev. Stat. 77-34442(2)(b), which provides that a learning community may establish a levy for general fund budgets of its member school districts, serves a predominantly local purpose, not a state purpose; and (2) because all members of the learning community received benefits from taxes levied and the levy was uniform throughout the community, there was no violation of either the Nebraska Constitution's prohibition of commutation or the uniformity clause. Remanded with directions to dismiss. View "Sarpy County Farm Bureau v. Learning Cmty. of Douglas & Sarpy Counties" on Justia Law

The North Port Road and Drainage District (NPRDD), a municipal dependent special district wholly contained within the City of North Port, levied non-ad valorem special assessments against nine parcels of real property owned by West Villages Improvement District, an independent special district of the State of Florida. The Second District held that NPRDD could not lawfully impose the special assessments on West Villages' real property without statutory authority. The court affirmed, but on the basis that NPRDD's home rule power under the Florida Constitution did not reach as far as it argued. Accordingly, because there was no way for West Villages to lawfully pay the special assessments, NPRDD's assessments fell within the limitations on home rule powers set forth in section 166.021(3), Florida Statutes. View "North Port Road And Drainage Dist., etc. v. West Villages Improvement Dist., etc." on Justia Law

Craig Street requested a refund of the local sales taxes the Missouri Director of Revenue required him to pay to license the boat, outboard motor, and trailer he purchased from a dealer in Maryland. The Administrative Hearing Commission (AHC) denied Street's request. Street appealed, claiming that the AHC erred because its interpretation of Mo. Rev. Stat. 144.069 and 32.087.12(2) to permit the County's assessment and collection of local sales tax on his out-of-state purchase was clearly contrary to the reasonable expectations of the General Assembly in enacting the local sales tax statutes. The Supreme Court reversed, holding that because the plain and ordinary meaning of the Sales Tax Law, Mo. Rev. Stat. 144.010 to 144.525, authorizes a county to impose sales taxes only on sales occurring within Missouri, the decision of the AHC upholding the Director's collection of a local sales tax on Street's out-of-state purchases was unauthorized by law. Remanded. View "Street v. Dir. of Revenue" on Justia Law

Defendant was convicted of 14 counts of willfully assisting in preparation of tax returns containing materially false and fraudulent claims, including phony medical and business expenses and charitable donations. The evidence at trial proved tax loss of $31,849. At sentencing, the government proposed a tax loss figure of $1.6 million by identifying 662 returns that contained materially false claims similar to those proven at trial and eliminating contested returns. The district court discounted the loss to $400,000- to $1-million to compensate for possible selection bias in a sample of 100 returns and imposed a sentence of 42 months. The Seventh Circuit affirmed. The tax loss figure was not outside the realm of permissible computations. The district court considered defendant's family circumstances as well as substantial aggravating circumstances, including her education, financial and intellectual abilities, knowledge of the tax code and duty to provide truthful information, and that her actions caused the IRS to audit her clients. Defendant also failed to appear for a sentencing hearing, was dishonest to the court, frivolously denied the court had jurisdiction over her, and similarly asserted she was an independent sovereign protected by the Eleventh Amendment.View "United States v. Littrice" on Justia Law