Justia Tax Law Opinion Summaries

In this case, Dean and Dave Cook filed a complaint with the Union County Board of Revision in February 2022, seeking an increase in the property valuation of an apartment complex owned by The Residence at Cooks Pointe, L.L.C. The Marysville Exempted Village Schools Board of Education filed a counter-complaint in May 2022, supporting the Cooks' claim that the property was undervalued. The Board of Revision held a hearing in August 2022 and decided not to change the property valuation due to insufficient evidence.The Marysville Exempted Village Schools Board of Education appealed the Board of Revision's decision to the Board of Tax Appeals (BTA) in September 2022. However, the BTA dismissed the appeal in December 2022, citing a recent amendment to R.C. 5717.01, effective July 21, 2022, which restricted the ability of school boards to appeal property valuation decisions unless they owned or leased the property in question. The school board then appealed to the Third District Court of Appeals, which reversed the BTA's decision, ruling that the amendment did not apply to cases pending before the Board of Revision when the amendment took effect.The Supreme Court of Ohio reviewed the case and affirmed the Third District Court of Appeals' decision. The court held that the amended R.C. 5717.01, which limits a political subdivision's ability to appeal a county board of revision's property valuation decision, does not apply to cases that were pending before a board of revision when the amendment took effect. The court emphasized that the language of the amended statute is written in the present tense and ties the right of appeal to the moment a complaint is filed with a board of revision. Therefore, the school board's appeal to the BTA should be considered under the former version of R.C. 5717.01. The case was remanded to the BTA for further proceedings. View "Marysville Exempted Village Schools Bd. of Edn. v. Union Cty. Bd. of Revision" on Justia Law

Eight rural electric cooperatives (RECs) sought judicial review after the Kansas Board of Tax Appeals (BOTA) denied their property valuation challenges for the 2019 and 2020 tax years. The RECs argued that the valuation methodology used by the Kansas Department of Revenue's Property Valuation Division (PVD) violated the requirement for "generally accepted appraisal procedures" under K.S.A. 79-5a04. The RECs elected to go to district court for a trial de novo, which allows for an evidentiary hearing where issues of law and fact are determined anew.The Shawnee County District Court agreed with the RECs, concluding that PVD's valuation methodology violated K.S.A. 79-5a04. The court found that the methodology resulted in non-uniform and unequal valuations of the RECs' properties, thus inflating their property values and taxes. The district court ordered PVD to adjust its methodology to account for the RECs' treatment of margin stabilization adjustments (MSAs) in their net operating income (NOI).On appeal, the Kansas Supreme Court reviewed whether the district court exceeded its scope of judicial review by considering issues not raised before BOTA. The Supreme Court held that a trial de novo under K.S.A. 2023 Supp. 74-2426(c)(4)(B) does not expand a district court's scope of judicial review beyond what is permitted by K.S.A. 77-617. The court determined that the RECs had only raised a constitutional issue regarding uniform and equal taxation before BOTA, not a statutory compliance issue under K.S.A. 79-5a04. Therefore, the district court exceeded its scope of review by deciding on the statutory issue.The Kansas Supreme Court reversed the district court's judgment, holding that the district court improperly expanded its scope of review by addressing the statutory compliance issue that was not litigated before BOTA. View "FreeState Electric Cooperative, Inc. v. Kansas Dept. of Revenue" on Justia Law

Precision Castparts Corp. (Precision Castparts) sought to deduct income included in its 2017 federal tax return under 26 U.S.C. § 965 (Section 965) from its Nebraska taxable income. Section 965, part of the Tax Cuts and Jobs Act (TCJA), required U.S. shareholders to include retained earnings of controlled foreign corporations (CFCs) in their income. Precision Castparts argued that this income should be deductible under Neb. Rev. Stat. § 77-2716(5), which allows deductions for "dividends received or deemed to be received" from foreign corporations.The Tax Commissioner denied Precision Castparts' request to amend its 2017 Nebraska tax return to claim this deduction, stating that Section 965 income is not considered "dividends" under federal tax law. The Commissioner concluded that Section 965 income is a "deemed inclusion" rather than a "deemed dividend."The district court for Lancaster County affirmed the Tax Commissioner’s decision. The court reasoned that Section 965 income does not meet the definition of a dividend under federal tax law because it involves no actual distribution. The court also agreed with the Tax Commissioner that Congress did not explicitly deem Section 965 inclusions as dividends, unlike other provisions in the Internal Revenue Code.The Nebraska Supreme Court reviewed the case and affirmed the district court's decision. The Court held that Section 965 income does not qualify as "dividends . . . deemed to be received" under § 77-2716(5). The Court noted that Section 965 employs pass-through treatment, attributing earnings to shareholders without deeming a distribution. Therefore, the income included under Section 965 is not deductible in Nebraska. The Court concluded that the district court did not err in affirming the Tax Commissioner’s order. View "Precision Castparts Corp. v. Nebraska Dept. of Rev." on Justia Law

A former employee of Credit Suisse, John Doe, filed a qui tam action under the False Claims Act (FCA) alleging that the bank failed to disclose ongoing criminal conduct to the United States, thereby avoiding additional penalties. This followed Credit Suisse's 2014 guilty plea to conspiracy charges for aiding U.S. taxpayers in filing false tax returns, which included a $1.3 billion fine. Doe claimed that Credit Suisse continued its illegal activities post-plea, thus defrauding the government.The United States District Court for the Eastern District of Virginia granted the government's motion to dismiss the case. The government argued that Doe's allegations did not state a valid claim under the FCA and that continuing the litigation would strain resources and interfere with ongoing obligations under the plea agreement. The district court dismissed the action without holding an in-person hearing, relying instead on written submissions from both parties.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court held that the "hearing" requirement under 31 U.S.C. § 3730(c)(2)(A) of the FCA can be satisfied through written submissions and does not necessitate a formal, in-person hearing. The court found that Doe did not present a colorable claim that his constitutional rights were violated by the dismissal. The court emphasized that the government has broad discretion to dismiss qui tam actions and that the district court properly considered the government's valid reasons for dismissal, including resource conservation and the protection of privileged information. The Fourth Circuit concluded that the district court's dismissal was appropriate and affirmed the judgment. View "United States ex rel. Doe v. Credit Suisse AG" on Justia Law

Michael Brown, a taxpayer, requested a collection due process hearing regarding a notice of tax lien on his property for unpaid taxes. He submitted an offer-in-compromise to settle his tax liability, which was referred to the IRS Collection Division for investigation. The Collection Division returned Brown's offer within seven months, deeming it nonprocessable. Over two years later, the Office of Appeals sustained the notice of tax lien.Brown petitioned the United States Tax Court, arguing that his offer-in-compromise should be deemed accepted by law under 26 U.S.C. § 7122(f) because the Office of Appeals did not issue a final determination within 24 months. The Tax Court rejected this argument, ruling that the Collection Division's return of the offer within the 24-month period constituted a rejection, thus stopping the clock on the 24-month deadline.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the Tax Court's decision. The Ninth Circuit held that the Collection Division's return of Brown's offer-in-compromise within seven months was a valid rejection under § 7122(f), regardless of the ongoing collection due process hearing. The court clarified that the 24-month period for the IRS to act on an offer-in-compromise is terminated by the Collection Division's return of the offer, not by the Office of Appeals' final determination. Therefore, Brown's offer was not deemed accepted by operation of law. View "BROWN V. COMMISSIONER OF INTERNAL REVENUE" on Justia Law

Maggie Anne Boler was convicted of six counts of presenting false claims against the United States by submitting fraudulent tax returns to the IRS and one count of making a false statement on a Paycheck Protection Program (PPP) loan application. Boler submitted six fraudulent tax returns, receiving refunds on four, totaling $116,106. Additionally, she falsely claimed a $20,833 PPP loan. She was sentenced to 30 months in prison.The United States District Court for the District of South Carolina calculated Boler's sentencing range based on the total intended financial harm, including the two denied tax returns, amounting to $180,222. Boler objected, arguing that only the actual loss should be considered, not the intended loss. The district court overruled her objection, holding that the term "loss" in the Sentencing Guidelines could include both actual and intended loss.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court concluded that the term "loss" in the Sentencing Guidelines is genuinely ambiguous and can encompass both actual and intended loss. The court deferred to the Sentencing Guidelines' commentary, which defines "loss" as the greater of actual or intended loss. The court found that the district court correctly included the full intended loss in Boler's sentencing calculation. Therefore, the Fourth Circuit affirmed the district court's judgment, upholding Boler's 30-month sentence. View "United States v. Boler" on Justia Law

Renee Vasko challenged her property tax assessment on two grounds: the revocation of her homestead classification and the assessed value of her property. In 2018, McLeod County sent a homestead application to Vasko’s property address, which was returned as undeliverable. The County learned from the City of Lester Prairie that there had been no measurable water use at the property since 2016. Consequently, the County revoked the homestead classification effective January 2, 2019, and assessed the property at $110,100.Vasko filed a petition in the Minnesota Tax Court, disputing the revocation of the homestead classification and the property’s assessed value. She presented evidence, including mail addressed to the property, utility records, and testimony, to establish occupancy and use of the property. Vasko also compared her property’s valuation to five other properties in the City to argue that her home was overvalued. The Tax Court found that Vasko did not occupy and use the property as a homestead in 2019 and upheld the County’s valuation, concluding that Vasko did not provide sufficient evidence to rebut the presumptive validity of the County’s assessment.The Minnesota Supreme Court reviewed the case and affirmed the Tax Court’s decision. The Court held that the Tax Court correctly placed the burden of proof on Vasko to show that the revocation of the homestead classification was unlawful and that the assessed value was incorrect. The Supreme Court found no clear error in the Tax Court’s findings that Vasko did not occupy and use the property as a homestead and that she failed to provide substantial evidence to challenge the County’s valuation. The decision of the Tax Court was affirmed. View "Vasko vs. County of McLeod" on Justia Law

Richard Plezia, a Houston-based personal injury attorney, was charged with conspiracy to defraud the United States, making false statements, and falsifying records in a federal investigation. The charges stemmed from allegations that Plezia conspired with other attorneys and case runners to unlawfully reduce the federal income taxes owed by Jeffrey Stern. The scheme involved funneling illegal payments through Plezia to case runner Marcus Esquivel, which were then falsely reported as attorney referral fees.The United States District Court for the Southern District of Texas held a fifteen-day jury trial, where Plezia was convicted on all counts. Plezia challenged the sufficiency of the evidence, the equitable tolling of the statute of limitations for one count, and the admission of certain witness testimonies. The district court denied his motions for acquittal and a new trial, and sentenced him to six months and one day in prison, followed by two years of supervised release.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court agreed with Plezia that the statute of limitations for the false statements charge was not subject to equitable tolling and vacated his conviction on that count, remanding with instructions to dismiss it with prejudice. However, the court affirmed the remaining convictions, finding sufficient evidence to support the jury's verdict on the conspiracy and falsification charges. The court also held that any error in admitting witness testimonies was harmless given the overwhelming evidence of guilt. View "United States v. Plezia" on Justia Law

In 2014, a woman and her two children from a previous relationship moved in with a man. They had a child together in 2018 and married in 2019. The man ran a trucking business, and the woman assisted with bookkeeping. She also worked briefly at a mental health facility and later as a secretary at a hospital. The couple separated in March 2022, and the woman filed for divorce shortly thereafter.The District Court of Weston County entered a stipulated decree of divorce in January 2023, settling child custody, visitation, and child support. However, the division of marital property was disputed. A bench trial was held in April, and the court issued its final order in November, dividing the marital property. The court considered the equitable value of the marital home, rental property, livestock, personal vehicles, personal property, and debts. The man was assigned the marital home, while the woman received her retirement funds and an equalization payment from the man.The man appealed to the Supreme Court of Wyoming, arguing that the district court abused its discretion in dividing the marital property. He contended that the court failed to allocate a portion of an IRS debt to the woman and improperly valued his trucking business. The Supreme Court reviewed the district court’s findings for an abuse of discretion and found no clear error. The court noted that the district court had appropriately considered the statutory factors under Wyo. Stat. Ann. § 20-2-114(a) and had made a just and equitable division of the property.The Supreme Court of Wyoming affirmed the district court’s decision, concluding that the property division was not so unfair and inequitable that reasonable people could not abide by it. The court also found that the district court had reasonably considered each of the statutory factors and that its ruling did not shock the conscience. View "Regan v. Regan" on Justia Law

Alvetta Massenberg inherited a 2.54-acre tract of undeveloped land in Clarendon County, South Carolina. After failing to pay property taxes for 2016, the Clarendon County Treasurer issued a tax execution to collect the delinquent taxes. The tax collector followed the statutory procedure by sending notices via regular and certified mail, but the certified mail was returned undelivered. Subsequently, a private contractor posted a "Notice of Levy" on a tree facing a one-lane dirt road on the property. The property was later sold at a public auction to Blacktop Ventures, LLC, which paid the outstanding taxes.The master-in-equity court refused to set aside the tax sale, concluding that the notice met the legal requirements for posting. The court did not specifically analyze whether the notice was posted in a "conspicuous" place. Massenberg appealed, and the South Carolina Court of Appeals affirmed the master's decision. Massenberg then petitioned for a writ of certiorari, which was granted.The South Carolina Supreme Court reviewed the case and focused on whether the notice was posted in a "conspicuous" place as required by subsection 12-51-40(c) of the South Carolina Code. The Court found that the tax collector failed to exercise judgment in ensuring the notice was posted conspicuously. The notice was posted on a tree facing a less-traveled dirt road, making it difficult to see. The Court determined that the notice should have been posted on the side of the property facing a more frequently traveled paved road. Consequently, the Court held that the tax collector did not comply with the statutory requirement, rendering the tax sale invalid.The South Carolina Supreme Court reversed the decision of the Court of Appeals, setting aside the tax sale. View "Massenberg v. Clarendon County Treasurer" on Justia Law