Justia Tax Law Opinion Summaries

Trinity, a designer and builder of vessels, appealed the district court's holding that the tax due Trinity was $135,787.60 for 1994 and $0 for 1995. The court vacated the district court's holding as to the consistency rule and remanded for findings as to whether, in light of the district court's Phase I order, the four base period vessels at issue were sufficiently experimental to constitute qualified research. The court concluded that the district court correctly held that the report's conclusion, though admissible evidence, was neither binding nor entitled to a presumption of correctness. Therefore, while the I.R.S.'s ultimate determination of Trinity's tax liability was presumptively correct, the revenue agent report's subsidiary conclusion that the Penn Tugs met the process-of-experimentation test was neither binding on the Government nor presumptively correct. Further, the district court did not err in its analysis of the Penn Tugs. Accordingly, the court affirmed in part, reversed in part, and remanded.View "Trinity Industries, Inc. v. United States" on Justia Law

In 2009, the Harrison County Board of Revision (BOR) issued two orders purporting to determine the value of two parcels owned by L.J. Smith, Inc. However, the BOR did not certify a transcript showing the filing of the complaint. Smith prosecuted an appeal to the Board of Tax Appeals (BTA) challenging the valuation. The BTA remanded the case to the BOR with instructions to vacate its decision, concluding that “nothing in the record demonstrated that Smith did, in fact, file a complaint” with the BOR. The Supreme Court affirmed, holding (1) the presumption of regularity was rebutted by the BOR’s failure to certify a transcript under these circumstances, and therefore, the BTA should not have relied on that presumption; but (2) the BTA acted reasonably and lawfully in deeming the evidence of filing to be insufficient and in vacating the BOR order. View "L.J. Smith, Inc. v. Harrison County Bd. of Revision" on Justia Law

Beavers was a Chicago alderman from 1983-2006, when he began serving as a Cook County Commissioner. He was the chairman of each of his three campaign committees and the only authorized signor for each committee’s bank account. Beavers’ federal tax returns underreported his 2005 income, misstated expenditures in semi-annual disclosure reports (D-2s), did not disclose use of campaign funds to increase his pension annuity, misrepresented loans between the committees and Beavers, did not report monthly stipends that Beavers took as a Commissioner, and did not disclose that Beavers wrote himself checks totaling $226,300 from committee accounts to finance gambling trips, without documenting the purpose of the expenditures or any repayment. After federal agents approached Beavers in connection with a grand jury investigation, Beavers filed amended tax returns and attempted to repay the committees. Beavers was convicted of three counts of violating 26 U.S.C. 7206(1), which prohibits willfully making a material false statement on a tax return, and with one count of violating 26 U.S.C. 7212(a), which prohibits corruptly obstructing the IRS in its administration of the tax laws. Beavers was sentenced to six months’ imprisonment and was ordered to pay about $31,000 in restitution and a $10,000 fine. The Seventh Circuit affirmed.View "United States v. Beavers" on Justia Law

Plaintiffs James Hansen and 30 other DeKalb County residents sought to obtain certain information from the DeKalb County Board of Tax Assessors in connection with their 2012 property tax assessments. The trial court denied Plaintiffs’ request for a mandamus nisi, and they appealed. Plaintiffs filed their requests for information each seeking information regarding the appraisal and assessment of his or her property for the 2012 tax year. The trial court found that plaintiffs' claims were not cognizable under the Georgia Open Records Act or in mandamus. The Supreme Court found no error in that decision, and affirmed. View "Hansen v. Dekalb Cty. Bd. of Tax Assessors" on Justia Law

In consolidated cases, homeowners Pinghua Zhao, and Gregg and Janet Fallick appealed the valuation of their residences for property tax purposes as a result of what they alleged was "tax lightning," also known as acquisition-value taxation. Under acquisition-value taxation, a real estate owner's property tax liability is determined by the value of the property when acquired, not by the traditional practice of taxing real property on its current fair market value. Consequently, there could be disparities in the tax liabilities of taxpayers owning similar properties. Upon review, the Supreme Court held that Section 7-36-21.2 (2003) created an authorized class based on the nature of the property and not the taxpayer. The Court also held that the New Mexico tax system did not violate the equal and uniform clause of the New Mexico Constitution because it furthered a legitimate state interest. Furthermore, the Court held that the Court of Appeals erred in its interpretation of "owner-occupant." Therefore, the Court affirmed in part and reversed in part the Court of Appeals. View "Zhao v. Montoya" on Justia Law

Public Service Company of Colorado applied for a tax refund from the state Department of Revenue. The company argued that it was entitled to a refund because it paid taxes when it was actually eligible for an exemption. The district court held in favor of the company, concluding that electricity was tangible personal property and that the production of electricity constituted manufacturing, thus entitling the company to the exemption (the "manufacturing exemption" under 39-26-709(1)(a)(II) C.R.S. (2013)). Upon review of the Department's argument on appeal, the Supreme Court reversed, finding that section 39-26-104(1)(d.1) applied in this case: electricity did not qualify as tangible personal property, and that the Code "contemplate[d] that 'electricity furnished and sold'" was to be taxed as a service. View "Department of Revenue v. Public Service Co." on Justia Law

After Plaintiff agreed to lease a motor vehicle he learned that he had been charged separately for property tax on the leased vehicle and an additional seven percent sales tax paid on that amount. Plaintiff filed a claim for a refund in the amount of sales tax he had paid on the property tax. The Division of Taxation denied Plaintiff’s claim. Plaintiff filed an appeal to the district court. Contemporaneously, Plaintiff filed a complaint in the superior court, seeking various forms of relief and seeking to certify his complaint as a class action. The superior court granted Defendants’ motion to dismiss the complaint for lack of jurisdiction. The Supreme Court affirmed, holding that the superior court lacked subject matter jurisdiction because the district court has exclusive jurisdiction over “tax matters.” View "Barone v. State" on Justia Law

Russell Phillips, an employee of the Chicago Central & Pacific Railroad, filed a negligence action against the railroad. The jury returned a general verdict in favor of Phillips, and the district court awarded Phillips damages. The railroad paid Phillips the amount of the judgment but withheld a portion of the award to pay taxes allegedly due under the Railroad Retirement Act (RRTA). Phillips refused to execute a satisfaction of judgment, arguing that the railroad should have withheld any amount for tax purposes. Subsequently, the railroad moved for an order of satisfaction and discharge of judgment. The district court sustained the motion. The Supreme Court affirmed, holding (1) an award for time lost is subject to tax withholding under the RRTA; and (2) the railroad fully satisfied the judgment.View "Phillips v. Chicago Cent. & Pac. R.R. Co." on Justia Law

This case began as a dispute between the parties regarding whether plaintiff owed tax under the now-repealed Single Business Tax Act (SBTA) related to plaintiff's contributions to its Voluntary Employees' Beneficiary Association (VEBA) trust fund for 1997 through 2001. In this case, the issue for the Supreme Court to decide was what actions a taxpayer must take under MCL 205.30 of the Revenue Act to trigger the accrual of interest on a tax refund. The Court held that in order to trigger the accrual of interest, the plain language of the statute requires a taxpayer to: (1) pay the disputed tax; (2) make a “claim” or "petition" for a refund; and (3) "file" the claim or petition. "Although a "claim" or "petition" need not take any specific form, it must clearly demand, request, or assert a right to a refund of tax payments made to the Department of Treasury that the taxpayer asserts are not due. Additionally, in order to "file" the claim or petition, a taxpayer must submit the claim to the Treasury in a manner sufficient to provide the Treasury with adequate notice of the taxpayer’s claim." View "Ford Motor Co. v. Dept. of Treasury" on Justia Law

In this case, the issue this case posed to the New Jersey Supreme Court was presented by the United States Court of Appeals for the Third Circuit: whether, under New Jersey law, a tax sale certificate purchaser holds a tax lien. In 1998, plaintiff Princeton Office Park, L.P. purchased a 220,000 square foot commercial building on thirty-seven acres of land in the Township of Lawrence. Princeton Office Park did not satisfy its real estate tax obligation to the Township of Lawrence. By 2005, Princeton Office Park owed the Township of Lawrence in back taxes and unpaid penalties. The Township conducted a public auction of municipal tax liens. Defendant Plymouth Park Tax Services, LLC bid on a tax sale certificate for Princeton Office Park’s property. As the owner of the tax sale certificate following the public auction, Plymouth Park paid municipal real estate taxes and charges for Princeton Office Park’s property through the second quarter of 2008. By operation of law, Plymouth Park’s additional payments were added to the sum required for Princeton Office Park to redeem the tax sale certificate owned by Plymouth Park. The redemption amount accrued interest at a rate of eighteen percent following the sale. In 2007, Plymouth Park filed a tax lien foreclosure action against Princeton Office Park seeking to enjoin Princeton Office Park from exercising any right of redemption of the certificate, and requesting a declaration that Plymouth Park was the owner in fee simple of the disputed property. The Chancery Division entered an order establishing a deadline by which Princeton Office Park could redeem the certificate. While Plymouth Park’s foreclosure action was pending in the Chancery Division, Princeton Office Park filed a voluntary Chapter 11 bankruptcy petition. Plymouth Park filed an initial proof of claim in the Bankruptcy Court, citing “taxes” as the basis for its claim. Plymouth Park then objected to Princeton Office Park’s Plan of Reorganization. The United States Bankruptcy Court ruled in favor of Princeton Office Park. The United States District Court for the District of New Jersey affirmed, substantially adopting the reasoning of the United States Bankruptcy Court. The District Court construed the Tax Sale Law to confer on the purchaser of a tax sale certificate a lien, but not a lien that would permit the holder of the certificate to collect unpaid taxes owed to the municipality. Plymouth Park appealed to the United States Court of Appeals for the Third Circuit. The New Jersey Supreme Court answered the Third Circuit's question in the affirmative: the purchaser of a tax sale certificate possesses a tax lien on the encumbered property. View "In re: Princeton Office Park v. Plymouth Park Tax Services, LLC" on Justia Law