Justia Tax Law Opinion Summaries

Landowners filed a complaint with the Auglaize County Board of Revision (BOR) challenging the auditor’s valuation of their property. The BOR notified Landowners that a hearing would be held. Neither Landowners nor anyone on their behalf appeared at the hearing. The BOR dismissed the valuation complaint for failure to prosecute based on Landowners’ failure to attend the scheduled hearing. The Board of Tax Appeals (BTA) reversed, concluding that the BOR had exceeded its discretionary authority in dismissing the complaint because the evidence presented raised the presumption that the sale furnished the criterion of value. The Supreme Court vacated the BTA’s decision, holding (1) BORs do not have the discretionary authority to dismiss a complaint based on the complainant’s failure to attend the scheduled meeting of the board; and (2) a BOR must make a determination of value whenever a complaint properly invokes its jurisdiction. Remanded. View "Ginter v. Auglaize County Bd. of Revision" on Justia Law

At issue in this case was whether the three-and-a-half year retroactive application of the 2010 amendments to N.Y. Tax Law 632(a)(2) were unconstitutional as applied to Plaintiffs under the due process clauses of the federal and state constitutions. Plaintiffs, Florida residents, brought this action claiming that the 2010 amendments retroactively imposed a tax on the 2007 sale of the stock of their subchapter S corporation in a deemed asset sale, for which they utilized the installment method of accounting for federal tax purposes, and seeking a declaration that the application of the amendments was unconstitutional as applied to them. Supreme Court granted summary judgment for Defendants, determining that the amendments were curative and, because Plaintiffs failed to show reasonable reliance on any relevant pre-amendment law, retroactive application of the statute was justified. The Appellate Division reversed. The Court of Appeals reversed, holding that retroactive application of the 2010 amendments did not violate Plaintiffs’ due process rights. View "Caprio v. New York State Dept. of Taxation & Fin." on Justia Law

Plaintiffs, several nonresident former owners and shareholders in an S corporation, filed the instant declaratory judgment action against the New York State Department of Taxation and Finance, challenging a tax imposed on their pro rata share of gains from the sale of the corporation’s stock. Specifically, Plaintiffs alleged that N.Y. Const. art. XVI, 3 absolutely precluded taxation of gains from the sale of a nonresident’s intangible personal property - in this case, the corporation’s stock. Supreme Court granted Defendant’s motion for summary judgment and declared that the statute is constitutional. The Court of Appeals affirmed, holding that there is no constitutional bar to taxation of a nonresident’s New York-source income earned from a stock sale. View "Burton v. New York State Dep’t of Taxation & Fin." on Justia Law

Petitioner owned and operated five commercial parking facilities for the purpose of furthering the goal of its sole member, a not-for-profit corporation, to revitalize downtown Jamaica, Queens. New York City Tax Commission revoked Petitioner’s real property tax exemption pursuant to N.Y. Real Prop. Tax Law 420-a(1)(a), determining that the use of the parking facilities, even for economic development of an underdeveloped area, did not constitute a “charitable” use and that the parking facilities were “not incidental to another recognized charitable purpose but [were] the very purpose for which the property [was] being used.” Supreme Court upheld the City’s revocation of the tax exemption. The Appellate Division reversed. The Court of Appeals reversed, holding that because Petitioner’s ownership and operation of the parking facilities was not incidental to a tax-exempt purpose, it was not entitled to a real property tax exemption under that statute. View "Greater Jamaica Dev. Corp. v. New York City Tax Comm’n" on Justia Law

George and Sandra Schussel filed no tax returns between 1989 and 2007. In 2007, George was convicted of federal conspiracy and tax evasion charges. Thereafter, the Commissioner of Revenue issued the Schussels a notice of failure to file Massachusetts income tax returns for the years 1993 to 1995. The Schussels filed tax returns for those years, but the Commissioner determined that the returns were “false or fraudulent” or to have been filed with an intent to evade taxes. Consequently, the Commissioner imposed a “double assessment” against the Schussels. The Commission denied the Schussels request for abatement of the double assessment. The Appellate Tax Board and the Appeals Court affirmed the Commissioner’s decisions. The Supreme Judicial Court affirmed, holding (1) the Board’s findings of fact were supported by substantial evidence; and (2) the Schussels’ claim that they were entitled to relief from the double assessment under an amnesty program established by the Commissioner in 2009 was not properly before the Court. View "Schussel v. Comm’r of Revenue" on Justia Law

VisionStream, Inc., a Missouri corporation that designed and constructed trade show exhibits and displays, filed for a refund of Missouri sales taxes it remitted for its sale of trade show displays that it produced and shipped in Missouri for customer use outside of Missouri. The Director of Revenue denied the refund request. On appeal, the Administrative Hearing Commission (AHC) affirmed, determining that VisionStream was not entitled to a sales tax refund on purchases shipped out of state. In so doing, the AHC rejected VisionStream’s argument that title of the displays did not transfer to customers until delivery outside the state. The Supreme Court affirmed, holding that the evidence supported the AHC’s finding that title transferred in Missouri. Therefore, the transactions were subject to Missouri sales tax. View "VisionStream, Inc. v. Dir. of Revenue" on Justia Law

This case arose out of the Tax Court’s determination that Petaluma was a sham entity and so would be disregarded for tax purposes, resulting in the potential imposition of penalties against individual partners for underreporting their taxable income. At issue in this third appeal was whether the Tax Court had jurisdiction at the current, partnership-level stage to determine the applicability of the penalties to the individual partners, or whether that determination instead must await the commencement of separate, partner-level proceedings against each partner. Assuming that a regulation in fact is necessary to create jurisdiction in the Tax Court, the court concluded that a different (and permanent) regulation is the operative one for purposes of conferring jurisdiction. Therefore, the court concluded that the Tax Court had jurisdiction to decide the applicability of penalties to Petaluma's partners. View "Petaluma FX Partners v. Commissioner" on Justia Law

This appeal involves a Son of BOSS tax shelter, which abuses the partnership form of doing business by “employ[ing] a series of transactions to create artificial financial losses that are used to offset real financial gains, thereby reducing tax liability.” At issue was whether and when the Tax Court may apply a penalty to a taxpayer who underpays his taxes by participating in a partnership that was nothing more than an intricate tax shelter. In this case, the parties recognize that United States v. Woods answered the questions about the Tax Court’s jurisdiction over penalties and outside basis. Taxpayer concedes rightly that the Tax Court properly applied his penalty when that court conducted its review of the partnership and its items, and the court affirmed the Tax Court on this point. In turn, the IRS acknowledges correctly that the Tax Court lacked jurisdiction to determine that the Tigers Eye partners had no basis in the partnership, and the court reversed the portion of the Tax Court’s decision that did so. The court remanded for further proceedings. View "Logan Trust v. Commissioner" on Justia Law

Costco withheld federal and state payroll taxes from plaintiff's award for lost wages. The trial court, under Lisec v. United States, ruled that the withholding was improper and denied Costco's motion for acknowledgment of satisfaction of the judgment. The court noted that in the 23 years since Lisec, the IRS and the vast majority of federal appellate courts have broadly interpreted the applicable Internal Revenue Code (IRC) provisions as requiring an employer to withhold payroll taxes for all "wages" arising from the employer-employee relationship, even after that relationship has terminated. Therefore, the court adopted this prevailing view and concluded that Costco properly withheld the payroll taxes. The court reversed and remanded with instructions. View "Cifuentes v. Costco Wholesale Corp." on Justia Law

Plaintiffs-taxpayers were indebted to the state for delinquent tax debts. The Department of Finance & Administration filed certificates of indebtness against Plaintiffs with respect to the tax delinquencies and assessed interest on Plaintiffs prior to and after the filing of certificates of indebtedness. Plaintiffs filed a complaint for declaratory and injunctive relief against Defendant, in his official capacity as Director of the Department, alleging illegal-exaction claims and due-process violations. Defendant moved to dismiss the complaint pursuant to Ark. R. Civ. P. 12(b)(1) and (6), alleging that Appellants had failed to plead facts necessary to establish subject-matter jurisdiction and failed to plead facts on which relief may be granted. The circuit court dismissed with prejudice Appellants’ complaint. The Supreme Court affirmed, holding that the circuit court did not err in (1) dismissing Appellants’ illegal-exaction claims where Appellants did not claim that the underlying tax delinquency was illegal; and (2) ruling that Appellants failed to plead facts to support their due-process-violation claims. View "Sanford v. Walther" on Justia Law