Justia Tax Law Opinion Summaries

This proceeding consisted of four consolidated appeals. The issue in two of the appeals was whether the alternative-energy infrastructures installed by Petitioners for their businesses met the statutory definition of “qualified alternative fuel vehicle refueling infrastructure” for the purpose of receiving an alternative-fuel infrastructure tax credit. The issue in the other two appeals was whether the alternative-energy infrastructures installed by Petitioners for their residences met the statutory definition of “qualified alternative fuel vehicle home refueling infrastructure” for the purpose of receiving an alternative fuel-infrastructure tax credit. The circuit court affirmed the final orders of the West Virginia Office of Tax Appeals that denied Petitioners’ requests for alternative-fuel infrastructure tax credits under W. Va. Code 11-6d-4(c). The Supreme Court affirmed, holding that the circuit court did not err in its judgment. View "Martin Distributing Co. v. Matkovich" on Justia Law

After Little Salt failed to pay its taxes, the Commissioner issued notices of transferee liability to the former shareholders. The tax court concluded that the former shareholders are liable for a portion of Little Salt's tax deficiency and the IRS appealed. The court agreed with the IRS that the Tax Court should have considered whether the stock sale should be recharacterized as a liquidating distribution to the shareholders under Nebraska law. However, the court declined to resolve the issue in the first instance. Accordingly, the court vacated the judgment and remanded to the tax court to consider whether the IRS is entitled to a full recovery from the former shareholders as transferees under Nebraska law. View "Stuart, Jr. v. CIR" on Justia Law

In 1999-2001, Diversified sold tax avoidance strategies to 192 clients: Option Partnership Strategy and the Financial Derivatives Investment Strategy. Each involved transactions, exercised by an individual client, to yield an artificial tax loss or deduction. Each client contributed the initial investment and paid a fee. Diversified did not register the services as tax shelters under 26 U.S.C. 61111. In 2002, the IRS began an audit of Diversified, and, in 2013, issued notices assessing penalties of $24,868,451 for failure to register OPS and $17,241,032 for failure to register FDIS. According to the IRS, the Strategies qualified as tax shelters because the computed tax shelter ratio was greater than 2:1 and each was a “substantial investment” under section 6111(c)(4). Diversified paid the assessments with respect to two clients, then unsuccessfully sought a refund. The Claims Court held, and the Federal Circuit affirmed, that it lacked jurisdiction because Diversified did not comply with the full payment rule. The courts rejected an argument that the penalties were divisible. Section 6707(a) provides that “if a person . . . fails to register such tax shelter . . . such person shall pay a penalty with respect to such registration.” Liability for a section 6707 penalty arises from the single act of failing to register. View "Diversified Group, Inc. v. United States" on Justia Law

The Montana Department of Revenue (DOR) informed Alpine Aviation, Inc. that it would be centrally assessed pursuant to Mont. Code Ann. 15-23-101 and 15-6-145. The DOR denied Alpine’s request for reclassification. After Alpine appealed to the State Tax Appeal Board, DOR brought an interlocutory appeal to the district court seeking an adjudication of the meaning of “scheduled airline” and “scheduled air commerce” for property tax purposes. Those terms are further informed by the statutory phrase “regularly scheduled flights.” After the district court interpreted the phrases as requested, Alpine appealed, arguing that the court incorrectly interpreted the phrase “regularly scheduled flights.” The Supreme Court affirmed in part and reversed in part, holding that the district court’s definition of “regularly scheduled flight” was satisfactory with the exception of its use of the phrase “patterned but not necessarily uniform.” View "Department of Revenue v. Alpine Aviation, Inc" on Justia Law

Menard, Inc. challenged Clay County’s assessment of the market value of Menard’s home improvement retail store as of January 2, 2011 through January 2, 2014. A trial ensued before the tax court, after which the court adopted market valuations below the County’s assessment values but above Menard’s expert appraiser’s valuation. Both Menard and the County appealed. The Supreme Court affirmed the tax court’s value determinations, holding that the tax court did not err in weighting the sales comparison approach and the cost approach for the valuation years at issue and did not fail adequately to explain its reasoning for that decision. View "Menard, Inc. v. County of Clay" on Justia Law

Hennepin County assessed real estate taxes on two properties owned by STRIB IV, LLC. STRIB IV applied to the County to classify the properties under Minnesota’s Green Acres statute, but the County denied the application. The tax court affirmed. The Supreme Court affirmed the tax court’s order, holding that STRIB IV’s subject properties did not qualify for Green Acres classification, as the Green Acres statute does not include properties owned by single-member LLCs such as STRIB IV, and the result required by the Green Acres statute’s plain language is not absurd. View "STRIB IV, LLC v. County of Hennepin" on Justia Law

BCN Telecom, Inc. was assessed a state service provider tax on certain flat charges that BCN imposed on some business customers’ lines from 2008 to 2011. The charges were designed both to reimburse BCN for presubscribed interexchange carrier charges that it paid to access local telephone infrastructure and to generate profits. The Sales and Use Tax Division of Maine Revenue Services affirmed the assessment. The Maine Board of Tax Appeals affirmed. On judicial review, the superior court granted summary judgment in favor of BCN, concluding that BCN’s charges were not part of the “sale price” of telecommunications service and that, even if they were, they were exempt from taxation under Me. Rev. Stat. 36, 2557(34) because they were charges for interstate telecommunications services. The Supreme Judicial Court vacated the judgment entered by the superior court, holding (1) the amounts received by BCN were subject to the service provider tax as part of the sale price for telecommunications services; and (2) BCN failed to provide prima facie proof that the tax exemption for interstate telecommunications services applied as a matter of law to these charges. View "BCN Telecom, Inc. v. State Tax Assessor" on Justia Law

In 2012, the City of Country Club Hills City Council adopted an ordinance that provided to homeowners a 25 percent rebate of 2010 city property taxes paid in 2011, subject to the completion of an application by the homeowner and approval by the City Clerk. This was the city’s twelfth consecutive year of offering a rebate program. The application stated that the “FILING OF THIS APPLICATION DOES NOT GUARANTEE APPROVAL BY THE CITY OF COUNTRY CLUB HILLS.” The city prepared the rebate checks but never distributed them. In 2012, the Cook County treasurer overpaid the city by more than $6 million. The county successfully sued to collect the overpayment. Bell filed a purported class action under 42 U.S.C. 1983, arguing that refusal to issue the rebates amounted to an unconstitutional taking and asserting state law claims for conversion and unjust enrichment. The City Council then repealed the 2012 ordinance. The Seventh Circuit affirmed dismissal, agreeing that Bell had no constitutionally protected property interest in the expectation of a rebate, and that she had adequate state court remedies for her claims under state law. View "Bell v. City of Country Club Hills" on Justia Law

Defendant appealed the district court's grant of summary judgment in favor of the United States for unpaid federal income taxes, late penalties, and interest accrued, arguing that the district court erred because her affidavit created a genuine factual dispute about whether she had paid the taxes and penalties owed. Reviewing de novo, the court concluded that the district court did not err by entering summary judgment in favor of the United States where the United States submitted copies of defendant's federal tax returns, transcripts of her accounts for tax years 1996 and 1999 through 2002, and an affidavit from an IRS officer that established defendant had outstanding tax assessments. In this case, the evidence created a presumption that the assessments were proper and shifted the burden to defendant to rebut the presumption with evidence that the assessments were erroneous. The court concluded that defendant's affidavit failed to create a genuine factual dispute about the validity of the assessments, and defendant's general and self-serving assertions that she paid the taxes owed and related late penalties for tax years 1996 and 1999 through 2002 failed to rebut the presumption established by the assessments. The court vacated the part of the judgment addressing the amount of defendant's assessments and remanded for the district court to credit her payment and to recalculate her assessment for tax year 1996. The court affirmed the entry of summary judgment regarding defendant's liability. View "United States v. Stein" on Justia Law

This appeal centered on who was entitled to real property tax increment revenue after the statutory dissolution of the San Jose Redevelopment Agency. The trial court held that tax increment revenue from a real property tax imposed to raise funds for the pension obligations of Santa Clara County was properly distributed to the Redevelopment Property Tax Trust Fund to pay the debts of the former redevelopment agency. Santa Clara County, with its Director of Finance Vinod Sharma, argued on appeal that this holding was erroneous. The trial court also held that statutes dissolving the former redevelopment agency required that certain tax increment revenue be passed through from the Redevelopment Property Tax Trust Fund to Santa Clara County instead of being used to meet the enforceable obligations of the former redevelopment agency. The City of San Jose, as the successor of the redevelopment agency, argued on appeal that this holding was erroneous. Finding no reversible error, the Court of Appeals affirmed the trial court. View "City of San Jose v. Sharma" on Justia Law