Articles Posted in US Court of Appeals for the Eighth Circuit

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In 2007-2010, the Hargises bought and operated nursing homes. Bobby was the sole owner of corporations that operated the homes (Operating Corporations), which were S corporations. Brenda owned interests in companies that bought and leased the homes to the Operating Corporations (Nursing Home LLCs). The Nursing Home LLCs were partnerships under 26 C.F.R. 301.7701-3(a). All the entities had net operating losses, which the Hargises deducted on their joint tax returns for 2009 and 2010. The Commissioner issued the Hargises a notice of deficiency, disallowing their deduction of most of the nursing home losses, due to the Hargises’ insufficient basis in their companies. The Hargises owed $281,766. The Tax Court ruled for the Commissioner. The Eighth Circuit affirmed. The Tax Court correctly denied Bobby any basis in the indebtedness of the Operating Corporations, finding “no convincing evidence that any of the lenders looked to [Bobby] as the primary obligor on the loans.” The Commissioner properly calculated Brenda’s basis from the Nursing Home LLCs’ tax returns (Schedule K-1). Her deduction of their losses is limited to “the adjusted basis of [her] interest in the partnership.” View "Hargis v. Koskinen" on Justia Law

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The Eighth Circuit affirmed defendant's conviction of evasion of payment of taxes and corruptly endeavoring to impede enforcement of Internal Revenue laws. The court held that the district court adequately warned defendant of the dangers of self-representation and did not err in finding that he understood them and knowingly waived his right to counsel. The court also held that the district court did nor err giving Eighth Circuit Pattern Jury Instruction No. 2.23, which instructs the jury that where a defendant represents himself, it may only consider his testimony as evidence. View "United States v. Stanley" on Justia Law

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The Eighth Circuit affirmed the tax court's order finding that taxpayer owed additional income taxes and penalties. The court held that the person that issued the notice of deficiency was in a supervisory position and thus the notice satisfied the statutory requirement that the deficiency be determined and sent by someone duly authorized by the Secretary of the Treasury. View "Muncy v. CIR" on Justia Law

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The Eighth Circuit reversed the district court's grant of summary judgment to the government in a suit by Union Pacific to recover a refund of about $75 million in taxes that it paid the federal government from 1991 to 2007 under the Railroad Retirement Tax Act (RRTA). The court held that the RRTA unambiguously does not require payment of RRTA taxes on remuneration in stock. Furthermore, the RRTA does not require Union Pacific to pay taxes when it made so-called ratification payments to employees when their unions ratified collective bargaining agreements. View "Union Pacific Railroad Co. v. United States" on Justia Law

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Petitioner claimed a charitable deduction of $16.4 million for donating an easement, but the Commissioner disallowed the deduction. The Eighth Circuit affirmed the tax court's ruling in favor of the Commissioner because petitioner did not make a qualified contribution easement pursuant to 26 U.S.C. 170(b)(1)(E). In this case, because the banks' mortgages were not subordinated before the charitable conveyance occurred in December 2003, petitioner was not entitled to a deduction on its 2003 tax return for a qualified conservation contribution. View "RP Golf v. Commissioner" on Justia Law