Justia Tax Law Opinion Summaries

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

In July 2024, Judge Marcus L. Hunter filed a notice of candidacy for the office of Associate Justice of the Louisiana Supreme Court, certifying that he had filed his federal and state income tax returns for the previous five years. Elisa Knowles Collins, a resident of District Two, challenged his candidacy, alleging that Judge Hunter falsely certified his tax filings. At trial, Collins presented an affidavit from the Louisiana Department of Revenue indicating no confirmed tax filings for Hunter for 2021, 2022, and 2023. Hunter's accountant testified that she electronically filed his 2022 and 2023 tax returns, but they were rejected by the IRS.The 19th Judicial District Court overruled Collins' challenge, finding that although she established a prima facie case, Hunter provided sufficient evidence to counter it. The Court of Appeal, Fourth Circuit, affirmed this decision, with two judges dissenting, arguing that Hunter did not meet his burden of proof.The Supreme Court of Louisiana reviewed the case and found that Hunter failed to provide sufficient evidence to rebut Collins' prima facie case. The court noted that Hunter did not testify or provide copies of his tax returns, and his accountant's testimony and documents were insufficient to prove that the tax returns were filed. Consequently, the Supreme Court reversed the lower courts' judgments, declared Hunter ineligible as a candidate, and directed the Secretary of State to remove his name from the ballot or void any votes cast for him if the ballot had already been printed. View "COLLINS VS. CHAMBERS" on Justia Law

A pipeline running through 13 Ohio counties was valued by the Ohio Tax Commissioner at $1,620,358,699 for tax year 2019. The pipeline's owner, Nexus Gas Transmission, L.L.C., appealed this valuation to the Board of Tax Appeals (BTA), arguing for a lower value of $615,695,340. The dispute was settled through an agreement between Nexus and the Tax Commissioner, setting the pipeline's value at $950,000,000 for 2019 and resolving valuation issues for 2020 and 2021. The Tax Commissioner issued a final determination reflecting these agreed values.The Lorain County Auditor, dissatisfied with the settlement, appealed the Tax Commissioner’s final determination to the BTA, arguing that the Commissioner had not followed statutory criteria in valuing the property. The BTA dismissed the appeal, stating that the valuation dispute had been resolved through the settlement agreement and that the auditor had not participated in the initial appeal process.The Supreme Court of Ohio reviewed the case, focusing on reconciling the Tax Commissioner’s authority to settle tax disputes under R.C. 5703.05(C) with the county auditor’s right to appeal under R.C. 5717.02(A). The court held that while a county auditor can appeal a final determination, this right does not extend to challenging the substance of a settlement agreement reached by the Tax Commissioner. The court emphasized that allowing such appeals would undermine the Commissioner’s statutory authority to settle disputes. The court affirmed the BTA’s decision, concluding that the county auditor’s appeal, which contested the valuation methodology rather than the validity of the settlement itself, could not proceed. View "Snodgrass v. Harris" on Justia Law

Grand Peaks, a nonprofit healthcare provider, applied for a full property tax exemption for its clinics and administrative offices in Rexburg, Idaho, under Idaho Code section 63-602C. Grand Peaks argued that it qualifies as a charitable organization and uses its property exclusively for charitable purposes, providing healthcare to underserved communities regardless of patients' ability to pay. The Madison County Board of Equalization granted a partial tax exemption of sixty-five percent, citing concerns about competition with for-profit healthcare providers and the revenue generated from insured patients.Grand Peaks appealed to the District Court of the Seventh Judicial District, which found that Grand Peaks qualified as a charitable organization and used its property exclusively for charitable purposes. However, the district court remanded the case to the Board for further fact-finding, suggesting that the partial tax exemption might be appropriate due to the "revenue-generating" nature of some of Grand Peaks' activities. The district court vacated the Board's sixty-five percent exemption, deeming it arbitrary and capricious.The Supreme Court of Idaho reviewed the case and reversed the district court's order for remand. The Court held that Grand Peaks is entitled to a full tax exemption under Idaho Code section 63-602C. The Court clarified that the proper test for tax exemption focuses on the exclusive use of the property for charitable purposes, not the income generated from the property. The Court found substantial and competent evidence supporting that Grand Peaks' properties are used exclusively for its charitable mission. The case was remanded to the district court with instructions to grant Grand Peaks a one hundred percent tax exemption for the properties at issue. Grand Peaks was awarded costs on appeal. View "Upper Valley Community Health Svcs, Inc. v. Madison County" on Justia Law

A Wisconsin-based corporation, Uline, Inc., sells industrial and packaging products and employs sales representatives who visit customers in Minnesota. Uline did not pay Minnesota income or franchise taxes for 2014 and 2015, claiming exemption under 15 U.S.C. § 381, which protects certain out-of-state business activities from state taxation. The Minnesota Commissioner of Revenue audited Uline and assessed taxes for those years, arguing that Uline's activities in Minnesota went beyond mere solicitation of orders.The Minnesota Tax Court upheld the tax assessment, finding that Uline's sales representatives engaged in activities beyond solicitation, specifically the preparation of "Market News Notes," which included detailed market research and competitor information. Uline appealed, arguing that these activities were either protected solicitation or de minimis and thus not subject to state taxation.The Minnesota Supreme Court reviewed the case to determine whether Uline's activities created a sufficient nexus with Minnesota to justify the imposition of state taxes. The court found that the preparation of Market News Notes by Uline's sales team went beyond the solicitation of orders because it involved detailed market research that served independent business functions. The court also determined that these activities were not de minimis, as they were regular and systematic, with over 1,600 Market News Notes prepared during the two years in question.The Minnesota Supreme Court affirmed the tax court's decision, holding that Uline's activities in Minnesota were not protected from state income or franchise taxation under 15 U.S.C. § 381 and were not de minimis. Therefore, Uline was subject to Minnesota state taxes for the years 2014 and 2015. View "Uline, Inc. vs. Commissioner of Revenue" on Justia Law

The plaintiffs, who regularly engage in cryptocurrency transactions, challenged amendments to 26 U.S.C. § 6050I, which now require reporting certain cryptocurrency transactions to the federal government. They argued that the law violates their constitutional rights under the Fourth, First, and Fifth Amendments, and exceeds Congress's enumerated powers. The plaintiffs claimed that the law's requirements would force them to disclose private information, incur compliance costs, and potentially expose them to criminal penalties.The United States District Court for the Eastern District of Kentucky dismissed the case, finding that it lacked jurisdiction to consider the merits of the plaintiffs' claims. The court ruled that the claims were either not ripe for adjudication or that the plaintiffs lacked standing. Specifically, the court found that the Fourth Amendment claim was not ripe because the law was not yet effective and the Department of Treasury was still developing rules. The First Amendment claim was dismissed for lack of standing, as the court deemed the plaintiffs' injuries too speculative. The court also found the Fifth Amendment vagueness claim unripe due to pending regulatory action, and the enumerated-powers claim unripe for similar reasons. The Fifth Amendment self-incrimination claim was dismissed as not ripe because the plaintiffs had not yet asserted the privilege.The United States Court of Appeals for the Sixth Circuit reviewed the case and found that the district court erred in dismissing the enumerated-powers, Fourth Amendment, and First Amendment claims. The appellate court held that these claims were ripe for review and that the plaintiffs had standing. The court noted that the plaintiffs, as direct objects of the law, would indeed be subject to the reporting requirements and incur compliance costs, thus suffering an injury in fact. The court affirmed the district court's dismissal of the Fifth Amendment vagueness and self-incrimination claims as not ripe. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Carman v. Yellen" on Justia Law

A nonprofit entity, Sports Medicine Research and Testing Laboratory (Sports Medicine), sought a property tax exemption for its South Jordan facility, claiming it was used exclusively for charitable purposes. Sports Medicine performs testing for both professional sports organizations at market rates and for government agencies and charitable organizations at discounted or no cost. It argued that the revenue from market-rate testing supports its charitable mission and that its vacant property space is intended for future charitable use.The Salt Lake County Board of Equalization denied the exemption, stating the property was not used exclusively for charitable purposes. Sports Medicine appealed to the Utah State Tax Commission, which affirmed the Board's decision. Sports Medicine then sought judicial review from the Utah Supreme Court.The Utah Supreme Court held that the property did not qualify for a tax exemption. The court reasoned that while Sports Medicine's discounted testing for charitable organizations could be considered a charitable use, its market-rate testing for professional sports organizations was not. The court emphasized that generating profit, even if used to support a charitable mission, does not constitute a charitable use of property. Additionally, the court found that the vacant portion of the property, intended for future charitable use, did not meet the requirement for current exclusive charitable use. Consequently, the court upheld the Tax Commission's denial of the property tax exemption. View "Sports Medicine Research v. Tax Commission" on Justia Law

The plaintiffs, Susan and Moses Libitzky, filed their 2011 tax return late in January 2016 and sought a refund for an overpayment of $692,690 in taxes from previous years. They had made substantial tax payments and received extensions but failed to file their returns on time due to their accountant's negligence. The IRS denied their refund request, asserting it was not filed within the statutory limitation period. The Libitzkys argued that their informal communications with the IRS in 2015 should count as an informal claim for a refund, which would stop the running of the statute of limitations.The United States District Court for the Northern District of California dismissed the Libitzkys' lawsuit, finding that their communications with the IRS did not amount to an informal claim for a refund. The court assumed a three-year limitation period applied but did not directly address whether a formal claim had been made in January 2016.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal but on different grounds. The Ninth Circuit held that the Libitzkys' formal refund claim, filed in January 2016, was timely under 26 U.S.C. § 6511(a) because it was made within three years of filing the return. However, the refund amount was limited by the look-back period under § 6511(b)(2), which restricts recovery to taxes paid within three years plus any extension before the refund claim was filed. Since the overpayment was deemed made in April 2012, outside the look-back period, the Libitzkys could not recover their overpayment. The court also held that the informal claim doctrine did not apply because the informal claim was untimely, as it was made before the 2011 return was filed, and thus the two-year limitation period applied. The court affirmed the district court’s dismissal for lack of jurisdiction. View "LIBITZKY V. USA" on Justia Law

The case involves the valuation of two commercial properties in a Woodbury shopping center for tax purposes. The taxpayer, Tamarack Village Shopping Center, LP, challenged Washington County’s initial assessments of the properties, arguing that the tax court should have used an effective rent calculation to account for tenant improvement allowances and deducted lease-up costs due to an above-market vacancy rate.The tax court heard testimony from the taxpayer’s real property asset manager, the taxpayer’s expert appraiser, and the County’s expert appraiser. The tax court largely accepted the County’s appraiser’s opinions and rejected the taxpayer’s appraiser’s opinions. The tax court’s final value conclusions increased the properties’ assessed market values over the county assessor’s initial valuations. The taxpayer appealed, contending that the tax court erred in its analysis by not using an effective rent calculation and by not deducting lease-up costs.The Minnesota Supreme Court reviewed the case. The court held that the tax court did not err in declining to use an effective rent calculation because the taxpayer’s tenant improvement allowances were typical of the market. The court also found that the tax court did not clearly err in declining to deduct lease-up costs from the property’s indicated value to account for its above-market vacancy rate, as the taxpayer failed to show that such a deduction was required. The court affirmed the tax court’s decision, upholding the increased assessed market values of the properties. View "Tamarack Village Shopping Center, LP vs. County of Washington" on Justia Law