Justia Tax Law Opinion Summaries

Defendant was convicted of one count of attempting to evade or defeat a tax; four counts of willful failure to file a tax return; and one count of attempting to interfere with the administration of internal revenue laws. Defendant appealed. Although the court granted defendant's motion to reconsider the clerk's denial of his motion to extend the time for filing a reply and allowed the brief to be submitted to the court, the court nevertheless concluded that the district court did not err in any respect. Because the court held that there were no merits to any of defendant's substantive points, and because the court held that the statute of limitations accrued from the last evasive act under 26 U.S.C. 6531(2), the court affirmed the judgment. View "United States v. Irby, Jr." 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

This appeal arose from a grand jury investigation in which the target of the investigation (the witness) was subpoenaed to produce any records of foreign bank accounts he was required to keep under Treasury Department regulations governing offshore banking. The witness informed the government that he would not comply with the subpoena, citing his Fifth Amendment privilege against self-incrimination, and the government moved to compel the witness to comply. Because the court concluded that the Required Records Doctrine applied in this case, the court declined the witness's invitation to create a circuit split and accordingly reversed the district court's denial of the government's motion to compel the witness to comply with the subpoena. View "In Re: Grand Jury Subpoena" on Justia Law

Maude Williams passed away in May 2000, leaving behind both a substantial fortune and incomplete estate-planning documents. Originally believing this omission precluded transfer of the relevant estate property to a limited partnership, her Estate paid over $147 million in federal taxes. The Estate later discovered Texas state authorities supporting that Williams sufficiently capitalized the limited partnership before her death, entitling the Estate to a substantial refund. In this refund suit, the Estate claimed a further substantial deduction for interest on the initial payment, which it retroactively characterized as a loan from the limited partnership to the Estate for payment of estate taxes. The district court upheld both the Estate's contentions. The court affirmed, holding that the district court correctly concluded that Williams' intent on forming the partnership was sufficient under Texas law to transfer ownership of the Community Property bonds to the partnership. The district court also correctly concluded that the post hoc restructuring of the transfer as a loan from the partnership back to the Estate for tax purposes was a necessarily incurred administrative expense; the Estate retained substantial illiquid land and mineral assets that justified the loan, and the loan did not constitute an "indirect use" of the Community Property bonds. View "Keller, et al v. United States" on Justia Law

Plains Capital and Boardwalk appealed a judgment finding them liable for conversion of the proceeds from a sale of a car that was subject to a tax lien. Boardwalk sold the car and gave the proceeds to Plains Capital to get Plains Capital to release the title, and Plains Capital applied the money to the taxpayer's debt. The IRS attempted to obtain the proceeds by levy after Plains Capital had applied the money to the debt, so Plains Capital claimed it no longer had any of the property. The court held that neither party was liable for conversion under Texas law but that Plains Capital was liable for failure to honor a tax levy. Because the court found that Plains Capital was liable for failure to honor a tax levy, interest accrued from the date it failed to honor the levy until the date the judgment was satisfied, at the underpayment rate in I.R.C. 6621(a)(2). Accordingly, the court reversed the judgment and remanded for further proceedings. View "United States v. Boardwalk Motor Sports, Ltd., et al." on Justia Law

The Government filed suit against Defendant, Barbara Coney, to reduce to judgment the tax liability owed by Barbara and her deceased husband, Curtis, for the tax years 1996-2001. The district court granted summary judgment in favor of the Government and rendered judgment in the amount of $2,687,408. Barbara appealed, primarily claiming that the couple's tax liability had been discharged in a prior bankruptcy proceeding. The Fifth Circuit Court of Appeals affirmed, holding (1) Curtis willfully attempted to evade or defeat his tax liabilities for the tax years at issue; (2) Barbara willfully attempted to evade or defeat her tax liabilities for the tax years at issue; and (3) the district court did not err in awarding the Government a money judgment, and the court awarded the judgment in a proper amount. View "United States v. Coney" on Justia Law

Dameware Development, LLC Defined Benefit Pension Plan and Trust bought several life insurance policies from American General Life Insurance Company. After Dameware was unable to obtain the tax benefits it hoped would result from purchasing the policies, it sued American General for damages and for rescission of the contract. The district court granted summary judgment to American General. The Fifth Circuit Court of Appeals affirmed, holding that Dameware had not shown any basis for rescinding the contract nor any contractual duties breached by American General, and therefore, the district court did not err in granting summary judgment to American General. View "Dameware Dev., LLC v. Am. Gen. Life Ins. Co." on Justia Law

The Commissioner sought review of a U.S. Tax Court decision favoring Entergy for the taxable years of 1997 and 1998. By reference to a companion case, the Tax Court concluded that Entergy was entitled to a foreign income tax credit for its subsidiary's payment of the United Kingdom's Windfall Tax. At issue on appeal was whether the Windfall Tax constituted a creditable foreign income tax under I.R.C. 901, 26 U.S.C. 901. The court concluded that when judged on its predominant character, the Windfall Tax was based on excess profits - realized income derived from gross receipts less deductions for substantial business expenses incurred in earning those receipts. This satisfied the three-part net gain requirement, as the Tax Court accurately noted. Therefore, the court affirmed the judgment. View "Entergy Corp. v. CIR" 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

Petitioners appealed the Tax Court's order dismissing their action against the Government for lack of jurisdiction. At issue on appeal was whether the Tax Court lacked jurisdiction where petitioners failed to file their petition within the Tax Equity and Fiscal Responsibility Act's (TEFRA), 26 U.S.C. 6226(a)-(b), express filing period. Because the court held that section 6226's 150-day limit was jurisdictional, the court had no authority to alter it. The plain language of the statue measured the 150-day filing period from the date the IRS mailed the final partnership administrative adjustments (FPAA) and it did not contemplate tolling. Petitioners filed the present petition 418 days after the FPAA was mailed, - over 250 days late. Therefore, the court affirmed the judgment. View "A.I.M. Controls, L.L.C., et al. v. CIR" on Justia Law