Justia Tax Law Opinion Summaries

The Supreme Court affirmed the tax court’s denial of relief to Ronald and Dee Johnson, who filed this action challenging the property taxes that Hennepin County assessed against their property. The tax court granted the County’s motion to dismiss the petition for tax years 2007 through 2012 because those claims were not filed in compliance with Minn. Stat. 278.01-.02 and dismissed the Johnson’s constitutional claims for lack of jurisdiction. The tax court then granted judgment in favor of the County on the Johnsons’ remaining claims challenging the assessment for the 2013 tax year. Thereafter, the tax court denied the Johnsons’ five post-trial motions. The Supreme Court affirmed, holding that the evidence in the record adequately supported each of the tax court’s decisions at issue. View "Johnson v. County of Hennepin" on Justia Law

The Fourth Circuit affirmed the district court's decision holding respondent in contempt after she failed to produce certain documents pursuant to an IRS summons. In this case, the IRS was investigating respondent's income tax liability and was seeking various documents. The court held that United States v. Rylander, 460 U.S. 752 (1983), was controlling in this case and that respondent's arguments against Rylander were meritless. The court also held that the district court did not abuse its discretion in finding petitioner in contempt where the IRS established that she had committed at least a constructive violation of the Enforcement Order by failing to produce documents presumptively within her possession or control, and respondent failed to satisfy her burden of demonstrating that she made in good faith all reasonable efforts to comply with the order. View "United States v. Ali" on Justia Law

District courts have discretion to award the equitable relief of a "gross-up" adjustment to compensate for increased income-tax liability resulting from a plaintiff's receipt of a back-pay award in one lump sum. In this case, the Ninth Circuit vacated the district court's order denying plaintiff a tax adjustment of a damages award in a Title VII case. The jury awarded damages for back pay and emotional distress, as well as punitive damages. The district court refused to consider adjusting plaintiff's lump sum back-pay award to account for the corresponding increse in his tax liability. The panel reversed and remanded for further proceedings, and addressed other issues in a concurrently filed memorandum disposition. View "Clements, Jr. v. CenturyLink Inc." on Justia Law

The Supreme Court affirmed the Board of Tax Appeals’ (BTA) decision on remand adopting the appraisal valuation of the property owner’s appraiser for the second time. The property at issue was a vacant 22.27-acre parcel that the Delaware County auditor valued at $654,100 for tax year 2011. The property owner challenged the valuation and presented an appraisal determining a value of $580,000 for the property. The Delaware County Board of Revision (BOR) ordered a reduction to $580,000 after adopting the appraisal. The BTA affirmed the adoption of the appraisal. The Supreme Court issued a remand order based on the parties’ stipulation that the BTA should address certain issues. On remand, the BTA addressed those issues and again relied on the appraisal of the property owner’s appraiser. The Supreme Court affirmed, holding that the BTA acted reasonably and lawfully when it relied on the appraisal. View "Olentangy Local Schools Bd. of Education v. Delaware County Board of Revision" on Justia Law

The Supreme Court vacated the decision of the Board of Tax Appeals (BTA) affirming the Franklin County Board of Revision’s (BOR) reduced valuation of a residential property in the amount of $65,000 for tax year 2011. The Franklin County auditor assigned a true value of $113,000 for tax year 2011. The owner filed a complaint seeking a reduction. The BOR reduced the property’s value to $65,000. The BTA upheld the BOR’s determination of value as sufficiently supported by the record. The Supreme Court remanded the matter to the BTA, holding that the BTA failed to evaluate independently the evidence to determine the value of the subject property. View "South-Western City School District Board of Education v. Franklin County Board of Revision" on Justia Law

Fadden earned over $100,000 per year but did not submit tax returns. After an audit, the IRS garnished his wages. Fadden filed for bankruptcy, triggering an automatic stay. Fadden claimed that he had no interest in any real property nor in any decedent’s life insurance policy or estate. Fadden actually knew that he would receive proceeds from the sale of his mother’s home (listed by the executor of her estate for $525,000) and would receive thousands of dollars as a beneficiary on his mother’s life insurance policies. A week later, Fadden mentioned his inheritance to a paralegal in the trustee’s office and asked to postpone his bankruptcy. When Fadden finally met with his bankruptcy trustee and an attorney, he confirmed that his schedules were accurate and denied receiving an inheritance. The Seventh Circuit affirmed his convictions under 18 U.S.C. 152(1) for concealing assets in bankruptcy; 18 U.S.C. 152(3) for making false declarations on his bankruptcy documents; and 18 U.S.C. 1001(a)(2) for making false statements during the investigation of his bankruptcy. Counts 1 and 2 required proof of intent to deceive. Fadden proposed a theory-of-defense instruction based on his assertion that his conduct was “sloppiness.” The Seventh Circuit upheld the use of pattern instructions, including that “knowingly means that the defendant realized what he was doing and was aware of the nature of his conduct and did not act through ignorance, mistake or accident.” View "United States v. Fadden" on Justia Law

The Supreme Court affirmed the order of the circuit court concluding that a large inventory of jet engine repair parts were not exempt from ad valorem property taxation.Petitioner maintained a vast inventory of jet engine repair parts at its West Virginia facility. Petitioner argued that the repair parts were exempt from ad valorem taxation pursuant to the Freeport Amendment contained in the West Virginia Constitution. The county assessor determined that the repair parts were not exempt from ad valorem taxation. The state tax commission upheld the determination. The circuit court affirmed. The Supreme Court affirmed, holding that the inventory of repair parts did not fall within the Freeport Amendment exemption. View "Pratt & Whitney Engine Services v. Steager" on Justia Law

The Supreme Court affirmed the district court’s dismissal of this putative class action for lack of standing.Taxpayers, owners of real property and payers of property taxes in Glacier County, paid their taxes under protest 2015 in response to an independent audit that revealed deficiencies in the County’s budgeting and accounting practices. Taxpayers sued the County and the State, alleging that both entities failed to comply with budgeting and accounting laws. The district court denied class certification and dismissed the case for lack of standing, concluding that Taxpayers failed to demonstrate that they had suffered a concrete injury. The Supreme Court affirmed, holding that the district court correctly determined that Taxpayers lacked standing to sue either the County or the State. View "Mitchell v. Glacier County" on Justia Law

Petitioner, Sierra Club, requested the Oklahoma Supreme Court to assume original jurisdiction and petitioned for a writ of prohibition or mandamus. Petitioner alleged that House Bill 1449 was a revenue bill that violated Article V, Section 33 of the Oklahoma Constitution. H.B. 1449 created the Motor Fuels Tax Fee for electric-drive and hybrid-drive vehicles, of $100 and $30 per year respectively, and directed that the money from the fees be deposited to the State Highway Construction and Maintenance Fund. The House passed H.B. 1449 on May 22, 2017 and the Senate passed it on May 25, 2017. H.B. 1449 passed with more than 51%, but less than 75%, of the vote in both chambers. It was scheduled to take effect November 1, 2017. The Oklahoma Supreme Court assumed original jurisdiction and transformed the petition into a request for declaratory relief. The Court found H.B. 1449 was enacted to raise revenue and was in violation of Article V, Section 33 of the Oklahoma Constitution. View "Sierra Club v. Oklahoma ex rel. Oklahoma Tax Comm'n" on Justia Law

El-Bey, a "Moorish national," created an EIN for the Trust, naming himself as the trustee and fiduciary. El-Bey filed six tax returns for the Trust, each seeking a $300,000 refund, signing each return, identifying himself as the fiduciary, and listing his date of birth as the date of trust creation. The IRS flagged these returns as frivolous and notified El-Bey that he would be assessed a $5,000 penalty per return if he failed to file a corrected return. El-Bey returned the letters to the IRS, including vouchers and tax forms bearing no relation to the returns. Based on the fourth and fifth tax returns, the IRS mailed two $300,000 refund checks, which El-Bey deposited, using the funds to purchase vehicles and to buy a house. After the sixth return, El-Bey was indicted on two counts of mail fraud, 18 U.S.C. 1341, and six counts of making false claims to the IRS, 18 U.S.C. 287. The district court allowed El-Bey to proceed pro se and appointed standby counsel over El-Bey’s objection. El-Bey advanced irrelevant arguments, interrupted the judge, and made it challenging to manage the trial. The court expressed frustration, but later instructed the jurors, who indicated that they could continue to be impartial. The Seventh Circuit remanded for a new trial. Statements by the court in the presence of the jury conveyed that El-Bey was guilty or dishonest and impaired El-Bey’s credibility in the eyes of the jury. View "United States v. El-Bey" on Justia Law