Justia Tax Law Opinion Summaries

Anzaldi, DeSalvo, and Latin concocted an $8 million fraudulent tax scheme based on a sovereign citizen-type theory that the U.S. government holds hidden bank accounts for its citizens that can be accessed through various legal maneuvers. By filing false tax returns, the three requested more than $8 million for themselves and others in tax refunds. The IRS accepted five of their returns, paying out more than $1 million in refunds before catching onto the scheme. A jury convicted all three of conspiracy to file false claims, 18 U.S.C. 286 and filing false claims upon an agency of the United States, 18 U.S.C. 287. Anzaldi and Latin appealed their convictions. The Seventh Circuit affirmed, rejecting Anzaldi’s claim that the court should have ordered a competency examination pursuant to 18 U.S.C. 4241(a) before allowing her to represent herself pro se; upholding admission of evidence of how Anzaldi structured her fees to be under $10,000; and rejecting a claim that the court erred by not instructing the jury that willfulness was required to convict, and instead instructing that the defendants had to have acted “knowingly.” View "United States v. Latin" on Justia Law

In 2012, the Fremont County Assessor assessed the commercial land and improvements of Mountain Vista Retirement Residence at $1,327,908 and its personal property at $8,246. The Fremont County Board of Equalization, the State Board of Equalization, and the district court upheld the valuation. Mountain Vista appealed, arguing that it should be exempt from property tax because it is a charitable or benevolent association that uses its property for primarily non-commercial purposes. The Supreme Court affirmed, holding that Mountain Vista is neither a charitable or benevolent association and that its property is primarily used for commercial purposes. View "Mountain Vista Ret. Residence v. Fremont County Assessor" on Justia Law

Pro se appellant Ray DeVilbiss owned property within a road service area, but did not make use of the roads built and maintained with the road service taxes levied on that property. He argued Alaska law required that his property therefore be excluded from the service area, and that the tax was invalid absent a special benefit to his property. The superior court rejected these claims, and granted the borough that oversaw the service area summary judgment. Appellant appealed to the Supreme Court, but the Supreme Court affirmed. Alaska law neither required boroughs and municipalities to exclude properties that do not make use of roads financed by road service taxes nor tied the validity of a tax to each taxpayer’s receipt of a special benefit. View "DeVilbiss v. Matanuska-Susitna Borough" on Justia Law

In 2012, as the result of a change in the way the Custer County assessor classified irrigated grassland for purposes of valuation, the assessor increased the assessed value of the property owned by Appellant from $734,968 to $1,834,924. Appellant filed petitions with the Tax Equalization and Review Commission (TERC) pursuant to Neb. Rev. Stat. 77-1507.01 challenging the valuation increase. After two separate hearings on Appellant’s petitions, TERC affirmed the assessor’s valuations for 2012. The Supreme Court reversed, holding that TERC’s consideration of Appellant’s petitions using the appellate standard of review described in Nev. Rev. Stat. 77-5016(9) constituted plain error. Remanded. View "Cain v. Custer County Bd. of Equalization" on Justia Law

At the center of this an appeal was the superior court's de novo valuation of the Trans-Alaska Pipeline System (TAPS) for tax assessment years 2007, 2008, and 2009. In February 2014 the Alaska Supreme Court issued a decision affirming the superior court's de novo valuation of TAPS for the 2006 assessment year.1 The parties introduced considerably more evidence during trial for the 2007, 2008, and 2009 years, but the operative facts remained substantially the same and the superior court applied similar standards and methods for valuation. Many of the issues raised on appeal were similar or identical to issues raised in the 2006 appeal and thus are partially or wholly resolved by the Court's prior opinion. Because the superior court did not clearly err or abuse its discretion with regard to any of its findings or its methodology, and because it committed no legal error in its conclusions, the Supreme Court affirmed. View "Alaska Dept. of Revenue v. BP Pipelines (Alaska) Inc." on Justia Law

The 1976 Railroad Revitalization and Regulatory Reform Act prohibits states from imposing taxes that “discriminat[e] against a rail carrier,” 49 U.S.C. 11501(b)(4)A, including: Assessing rail transportation property at a value with a higher ratio to the true market value of the property than the ratio applied to other commercial and industrial property; levying or collecting an ad valorem property tax on rail transportation property at a tax rate that exceeds the rate applicable to commercial and industrial property in the same jurisdiction; or imposing “another tax that discriminates against a rail carrier providing transportation.” Railroads sued, claiming that Tennessee sales and use tax assessments were discriminatory. The district court agreed, holding that imposition of those taxes on railroad purchases and use of diesel fuel was discriminatory. In response, in 2014, Tennessee enacted a Transportation Fuel Equity Act that repeals the sales and use tax on railroad diesel fuel, but subjects railroads to the same per-gallon tax imposed on motor carriers under the Highway User Fuel Tax. Previously railroads, like other carriers using diesel fuel for off-highway purposes, were exempt from a “diesel tax.” The Railroads contend the Act is discriminatory because it now subjects only railroads to taxation of diesel fuel used off-highway. The Sixth Circuit affirmed denial of the Railroads’ motion for a preliminary injunction on its targeted or singling-out approach and the functional approach, but remanded for consideration of the Railroads’ argument under the competitive approach. View "CSX Transp., Inc. v. Tenn. Dep't of Revenue" on Justia Law

In 1966, DeBough purchased a Minnesota residence and surrounding 80 acres for $25,000. In 2006, DeBough sold the property for $1.4 million under an installment contract, secured by the property. Because the property was his principal residence,DeBough excluded $500,000 of gain from income on his 2006 tax return, 26 U.S.C. 121. DeBough received $505,000 from the buyers and reported $56,920 as taxable installment sale income for tax years 2006, 2007, and 2008. In 2009, the buyers defaulted. DeBough reacquired the property, incurring $3,723 in costs. DeBough kept the $505,000 previously received from the buyers as liquidated damages. On his 2009 tax return, DeBough treated this event as a reacquisition of property in full satisfaction of indebtedness under 26 U.S.C. 1038. In calculating his realized gain, DeBough again applied the $500,000 principal-residence exclusion. DeBough reported $97,153 as long-term capital gains related to the reacquisition for tax year 2009. The Commissioner sent DeBough a notice of deficiency, having determined DeBough had underreported $448,080 in long-term capital gain for tax year 2009 by applying the principal-residence exclusion in his calculation. The Tax Court and Eighth Circuit agreed that DeBough was not entitled to the principal-residence exclusion because he had not resold the property within one year. View "DeBough v. Shulman" on Justia Law

Klein Honda was a Honda dealership. From time to time, Honda (the manufacturer) offered a "dealer cash" incentive program for its dealerships whereby dealerships can earn a specific amount of extra money if they sold specific Honda models during specific times and comply with other terms and conditions. At issue in this case was whether Klein Honda's dealer cash earnings were taxable. "Klein Honda received additional, separate income beyond its ordinary retail sales. That constitutes an additional taxable business activity under the [B&O] catchall provision. Although dealer cash would not be taxable under one of the Washington State Department of Revenue's regulations if it represented a 'bona fide discount' on Klein Honda's wholesale purchase of vehicles, dealer cash is not a bona fide discount because Klein Honda does not purchase vehicles from Honda subject to a dealer cash discount. Dealer cash payments are not necessarily quantified or even knowable at the time that Klein Honda purchases vehicles from Honda. Thus, Klein Honda's dealer cash is taxable." View "Steven Klein, Inc. v. Dep't of Revenue" on Justia Law

Several Indian tribes successfully challenged the imposition of state fuel taxes on tribal retailers. Since then, the State and various tribes signed agreements under which the tribes agreed to buy taxed fuel, and the State agreed to refund a portion of the fuel tax receipts to the tribes. An industry group unsuccessfully challenged the lawfulness of these agreements. The issue this case presented for the Washington Supreme Court's review reduced to whether those agreements violated article II, section 40 of the State Constitution. "Without passing judgment on whether the legislature successfully moved the legal incidence of the tax away from tribal retailers," the Supreme Court affirmed dismissal of the industry group's challenge. View "Auto. United Trades Org. v. Washington" on Justia Law

In 2011, Appellant purchased a two-family dwelling from the United States Department of Housing and Urban Development for $5,000. The Cuyahoga County fiscal officer valued the property at $126,800 for tax year 2011. Appellant sought a reduction to $30,000. The County Board of Revision retained the fiscal officer’s valuation. The Board of Tax Appeals (BTA) affirmed. The Supreme Court reversed, holding that the BTA acted unreasonably when it found that the property’s 2011 sale price was not the best evidence of its tax year 2011 value. Remanded with instructions that the $5,000 sale price be used as the property’s value for tax year 2011. View "Schwartz v. Cuyahoga County Bd. of Revision" on Justia Law