Justia Tax Law Opinion Summaries

Petitioners donated a conservation easement to a land trust and claimed a $10,524,000 charitable deduction for the asserted value. The Tax Court held that the easement did not qualify as a charitable contribution and petitioners were not entitled to the deduction. The Tax Code and Treasury Regulations together make clear that 26 U.S.C. 170(h)(2)(C) means that a charitable deduction may be claimed for the donation of a conservation easement only when that easement restricts the use of the donated property in perpetuity. In this case, because the easement fails to meet this requirement, it is ineligible to form the basis of a charitable deduction under section 170(h)(2)(C). The court rejected petitioners' contention that the court should reject this straightforward application of statutory text and affirmed the judgment. View "Belk, Jr. v. CIR" on Justia Law

After the IRS made an assessment against defendant for the 1996 tax year, the government filed a complaint seeking to reduce the assessment to judgment and to foreclose tax liens against two parcels of property. The district court determined that the government's collection suit was not barred by the ten-year statute of limitations pursuant to 26 U.S.C. 6502(a)(1). The court held that the tolling period provided for in section 6330(e)(1) includes the time during which a taxpayer could file an appeal to the Tax Court, even if he does not actually file such an appeal. Applying Chevron, the court concluded that the Treasury Department's issuance of 26 C.F.R. 301.6330-1(g)(1) was a permissible construction of section 6330(e)(1). Therefore, the government's collection action against defendant was not barred by the statute of limitations and the court affirmed the judgment. View "United States v. Kollman" on Justia Law

Miner marketed two schemes that promised to avoid taxes. Miner’s first scheme, IRx Solutions, offered to assist clients in requesting alterations to their Individual Master Files (IMFs), which are internal IRS records pertaining to each taxpayer. Miner claimed that the IRS was engaged in widespread fraud by improperly coding individuals as businesses on their IMFs so that tax could be assessed against them. The second scheme, Blue Ridge Group, helped clients create common-law business trusts, into which he claimed that they could place any or all of their assets in order to avoid paying income tax. Affirming his conviction under 26 U.S.C. 7212(a) for corruptly endeavoring to obstruct the “due administration” of federal income tax laws, the Sixth Circuit rejected arguments that the district court reversibly erred in failing to instruct the jury that section 7212(a) required proof that he was aware of a pending IRS proceeding; that his conduct was constitutionally and statutorily protected; and that certain witness testimony was improperly introduced at trial because the witness opined about his state of mind. View "United States v. Miner" on Justia Law

In 2006, Boyd sent his income and expense information for 2004 to a tax specialist, who prepared a return showing a tax liability of over $27,000. Boyd did not file the return he received from the tax specialist. Instead, Boyd filed his tax returns for 2004, 2005, and 2006 in October 2007, having recently read a book called Cracking the Code, which espoused a theory that federal income tax obligations applied only to individuals who earned income working for the federal government. The three returns declared that in those years he had zero income and zero tax liability. During those three years, Boyd actually had continued the work he had done in prior years and had earned income totaling $795,000. Convicted under 26 U.S.C. 7206(1), Boyd argued that the government had not proven willfulness because it failed to show the absence of a good-faith belief that the he did not have to file returns or pay taxes. The Fifth Circuit affirmed, rejecting challenges to denial of funding for neuropsychologist testimony, admission of uncharged conduct, the prosecutor’s statements, the judge’s statements, the jury instructions, the response to a jury note, and the sufficiency of the evidence. View "United States v. Boyd" on Justia Law

In 2002, the Mingos, married taxpayers, reported the sale of a partnership interest, including the portion of the proceeds attributable to the partnership’s unrealized receivables, through the installment method of accounting. In an action brought to determine their federal income tax liability, the tax court held that the Mingos were not entitled to utilize the installment method to report the unrealized receivables and that the IRS appropriately applied section 481(a) of the Internal Revenue Code in 2007 to adjust the Mingos’s 2003 joint income tax return to account for the unrealized receivables income that should have been reported in 2002. The Fifth Circuit affirmed, rejecting a claim that the determination that the installment sale reporting of the unrealized receivables in 2002 did not clearly reflect Mrs. Mingo’s income and a challenge to the Commissioner’s authority to change her method of accounting in 2003, given that the allegedly erroneous reporting under the installment method occurred in 2002, the year of the sale. View "Mingo v. Comm'r of Internal Revenue" on Justia Law

Appellant bought tobacco products from a Missouri wholesaler and sold the tobacco products to Missouri retailers. Appellant did not report the sale of the tobacco products on his tax returns. The Director of Revenue determined that Appellant was responsible for the first sale of the tobacco products within the state. The Administrative Hearing Commission (AHC) agreed with the Director’s decision, determining that, although Appellant did not sell the tobacco products at retail to consumers, Appellant was liable for the ten-percent tax imposed on the “first sale of tobacco products, other than cigarettes” within the state. The Supreme Court affirmed, holding that the AHC correctly determined that the Director’s assessment of tax, interest, penalties, and costs was proper. View "Lalani v. Dir. of Revenue" on Justia Law

Serban worked as a massage therapist at Voda Spa. Serban and Voda Spa disagree as to why he left that work, but the trial court found Serban had good cause to leave and that finding was not challenged. They also disputed whether Serban was an employee or independent contractor. The California Unemployment Insurance Appeals Board found that he was an employee, not an independent contractor, and the trial court agreed with the Board that its decision was not subject to judicial review because both the California Constitution and the Unemployment Insurance Code bar actions whose purpose is to prevent the collection of state taxes. The court of appeal reversed, agreeing that the case does not challenge the imposition of a tax. View "W. Hollywood Cmty. Health & Fitness Ctr. v. CA Unemp. Ins. Appeals Bd." on Justia Law

Two landowners owned property served by a regional sewer district. The district had perfected liens against the properties due to the landowners’ failure to pay fees and penalties. The trial court listed the properties to be sold at a tax sale to satisfy obligations for the unpaid sewer bills. The landowners subsequently petitioned the circuit court to remove their properties from the tax sale list. The circuit court granted the petitions, concluding that because the district maintained the only lien, the district was precluded from foreclosing on the parcels pursuant to Ind. Code 13-26-14-4. The Supreme Court reversed, holding (1) the foreclosure prohibition of Ind. Code 13-26-14-4, which governs the collection of regional sewer district sewer liens, does not apply to collection by tax sale; and (2) because the district did not seek collection of the landowners’ unpaid fees and penalties through the lien foreclosure method, but rather employed the tax sale method, the lien foreclosure prohibition clause did not apply. Remanded. View "In re Carroll County 2013 Tax Sale" on Justia Law

In opening and closing arguments during his trial on three counts of tax evasion for failing to pay almost $239,400 in income tax between 2005 and 2007, 26 U.S.C. 7201, Stuart’s attorney argued that he believed he owed no taxes. Stuart thought that the United States had no authority to tax income. Stuart had adopted these views after reading a book called “Cracking the Code,” which urges people to resist paying income taxes, but his counsel told the jury that Stuart learned his ideas from his fellow church patrons. Counsel described Stuart as a curious, determined, and “kooky, not criminal” person. Only after he received no response to his inquiries from the IRS, the Secretary of the Treasury, or his accountants about his tax ideas, counsel stated, did Stuart begin to refrain from paying income tax. His attorney did not call any witnesses; Stuart did not testify and the jury found him guilty. The Seventh Circuit affirmed, rejecting an argument of ineffective assistance of counsel. View "United States v. Stuart" on Justia Law

The Indian Hill Exempted Village School District Board of Education (BOE) passed a resolution to convert 1.25 inside mills from operating levies to permanent-improvement levies. The conversion had the effect of increasing the effective rate of taxation under the “outside millage,” resulting in the district experiencing a net increase of revenue and the district’s taxpayers experiencing an increased burden. The Hamilton County Budget Commission approved to the conversion of the inside mills. The Board of Tax Appeals affirmed. The Supreme Court reversed, holding that because the BOE did not demonstrate that the revenue derived from the increased effective rate of taxation under the outside mills was necessary to cover operating expenses during the ensuing fiscal year, the BOE did not meet the requirements of Ohio Rev. Code 5705.341. View "Sanborn v. Hamilton County Budget Comm’n" on Justia Law