Justia Tax Law Opinion Summaries

The Tulsa County Assessor assessed ad valorem taxes on portions of real property owned by the respondent-appellees (and taxpayers) William Warren Medical Research Center and Montereau, Inc. The taxpayers challenged the assessment and the County Board of Equalization determined that the properties were not taxable. The Assessor appealed to the Tulsa County District Court which found in favor of the taxpayers. The Assessor again appealed but the Court of Civil Appeals dismissed the appeal because the Assessor was not represented by the district attorney, nor the State Attorney General. On certiorari, the Supreme Court held that county assessors may employ counsel to represent them in court proceedings including appeals from the Board of Equalization. Accordingly, the Court remanded the matter to the Court of Civil Appeals to address the merits of the appeal. View "Yazel v. William K. Warren Medical Research Center" on Justia Law

Irwin and Fannin owned Portsmouth Ambulance, and Urgent Care Transports. In 2000, 2002, and 2005, they failed to pay federal employment and corporate income taxes for Urgent Care; the IRS recorded tax liens. Irwin and Fannin entered into a stock-purchase- agreement in 2006 and transferred 86% of the Portsmouth stock to new owners. The agreement gave the new owners an option to purchase the stock of Urgent Care. Portsmouth exercised the option and Urgent Care became its wholly-owned subsidiary. Irwin and Fannin notified the IRS of the change. Because of its outstanding tax liability, the IRS ordered a sale of Urgent Care’s assets. The sale did not raise sufficient funds. The new owners failed to pay federal employment taxes for 2008, and notice of tax liens was recorded. The IRS also filed a notice of federal tax lien against Portsmouth Ambulance as the alter ego of Urgent Care. A creditor bank sold the company’s assets and Portsmouth ceased operations. From sales proceeds, $333,769.24 was applied to Urgent Care’s tax liabilities and $302,818.16 was used to reduce Portsmouth’s tax liability. Portsmouth objected, arguing that it was not the alter ego of Urgent Care and filed refund claims, which the IRS either did not address or denied. The district court dismissed a suit, holding that 26 U.S.C. 6325(b)(4) and 7426(a)(4), established an exclusive procedure to seek refunds for satisfaction of a tax lien by a property owner with respect to another party’s tax liability and that a request for damages for allegedly unauthorized collection action was time-barred. The Sixth Circuit affirmed.View "Portsmouth Ambulance, Inc. v. United States" on Justia Law

The Commissioner of Revenue notified JME of Monticello (JME), a waste management service provider, that it intended to audit JME’s waste management returns for a certain period. After the audit, JME was assessed approximately $87,000 in additional solid waste management taxes and interest. The Commissioner reached this determination after concluding that JME improperly calculated its waste management tax based on JME’s incorrect interpretation of Minn. Stat. 297H.04. JME appealed and brought a motion for summary judgment. The tax court upheld the Commissioner’s tax order. The Supreme Court affirmed, holding that the Commissioner correctly interpreted section 297H.04 and had correctly calculated the tax.View "JME of Monticello, Inc. v. Comm’r of Revenue" on Justia Law

In this appeal, the issue this case presented to the Supreme Court was whether a transfer of real property between affiliated business entities constituted a "sale" for purposes of the Documentary Stamp Tax Act. Defendants Homesales, Inc., JPMorgan Chase Bank, N.A. and EMC Mortgage, LLC, f/k/a EMC Mortgage Corporation appealed an order granting partial summary judgment in favor of Plaintiffs Murray County, Oklahoma, County Commissioners ex rel. Murray County, Oklahoma and Johnston County, Oklahoma, County Commissioners ex rel. Johnston County, Oklahoma (the Counties). Chase filed four foreclosure cases and was the successful bidder at each sheriff's sale. Therefore, Chase was entitled to a sheriff's deed to each of the properties. However, Chase did not take title. Instead, sheriff's deeds were granted to Chase's affiliated entities. The deeds were recorded with the respective county clerks. The grantees noted on the conveyances that the deeds were exempt from documentary taxes. No documentary taxes were paid. The Counties contended the conveyances involved in this case were not exempt and filed suit to collect the applicable documentary taxes. The district court granted partial summary judgment to the Counties finding that the conveyances were not exempt from the DSTA, and that the Counties could sue to enforce the provisions of the DSTA and collect the documentary taxes that were not paid on these transactions. The Supreme Court, however, concluded that the Counties were not authorized to prosecute violations of the DSTA. The Counties did have standing to challenge the exemptions from the documentary tax claimed for these conveyances. The Court reversed the order granting partial summary judgment and remanded the case for further proceedings. View "Murray County v. Homesales, Inc." on Justia Law

Andrie Inc. brought an action in the Court of Claims, seeking a refund of use taxes it had paid under protest for the years 1999 through 2006 after an audit by the Department of Treasury determined that Andrie had understated the taxes it owed for that period under the Use Tax Act (UTA). In order to be entitled to the exemption from the use tax, a taxpayer must show that the sales tax was both due and paid on the sale of that tangible personal property. Because Andrie did not submit any evidence that sales tax had been paid, Andrie was not entitled to the use tax exemption. The Court of Appeals judgment was reversed to the extent it held that the use tax could never be levied on property if the purchase of that property was subject to sales tax. View "Andrie, Inc. v. Dept. of Tresasury" on Justia Law

After taxpayers failed to pay federal income taxes for the 2007 tax year, the IRS assessed the unpaid amount plus penalties and interest, and then attempted to collect them from taxpayers by means of a levy on the couple's home. Taxpayers unsuccessfully challenged the proposed levy in the Tax Court. On appeal, taxpayers contend that the Tax Court judge may have been biased in favor of the IRS in a manner that infringed the constitutional separation of powers. The court held that 26 U.S.C. 7443(f) did not infringe the constitutional separation of powers. Even if the prospect of "interbranch" removal of a Tax Court judge would raise a constitutional concern in theory, there is no cause for concern in fact: the Tax Court exercises Executive authority as part of the Executive Branch. Presidential removal of a Tax Court judge thus would constitute an intra-branch removal. The court rejected taxpayers' remaining claims and affirmed the judgment of the district court.View "Kuretski, et al. v. Commissioner of IRS" on Justia Law

Taxpayer donated a facade conservation easement to the National Architectural Trust, and claimed a charitable deduction under I.R.C. 170(f)(3(B)(iii). On appeal, Taxpayer challenged the Tax Court's judgment finding that the easement had no negative impact on the value of her property. The court concluded that the Tax Court's conclusion that the facade easement did not reduce the fair market value of Taxpayer's house was supported by substantial evidence. The court rejected Taxpayer's claim under I.R.C. 7491. Accordingly, the court affirmed the judgment of the district court.View "Scheidelman v. Commissioner of Internal Revenue" on Justia Law

In tax year 2007, a county fiscal officer valued an improved 6.415-acre parcel in the county at $8,740,000, consistent with the property's 2004 sale price. The property owner filed an amended complaint seeking a reduction to $3,100,000. The board of revision issued a decision retaining the fiscal officer’s valuation of the property. The owner and the school board of education both appealed. Before the board of tax appeals (BTA), the parties presented competing appraisals. The BTA accepted the owner’s appraisal and assigned a value of $3,100,000. The Supreme Court affirmed, holding (1) the school board did not show that the BTA’s acceptance of the valuation presented by the owner was unlawful or unreasonable; and (2) the record supported the BTA’s decision.View "Health Care REIT, Inc. v. Cuyahoga County Bd. of Revision" on Justia Law

Petitioner, the Coos County Commissioners (collectively CCC), on behalf of the unincorporated places of Dixville and Millsfield, appealed a New Hampshire Board of Tax and Land Appeals (BTLA) decision which denied the CCC's motion to reconsider and revise downward respondent's, the New Hampshire Department of Revenue Administration (DRA), 2012 equalized valuations of Dixville and Millsfield because the CCC did not show that the valuations were unreasonable and disproportionate. The Supreme Court affirmed in part, reversed in part, and remanded for a rehearing. The CCC argued that: (1) the DRA's assessed value of the property, Windpark, was greater than its fair market value and, therefore, the DRA's equalized valuations for Millsfield and Dixville were disproportionate and unreasonable; (2) the BTLA erred by denying its motions to compel production of the Windpark appraisal and to continue the hearing, and by not allowing the CCC's expert witness to testify during the hearing; and (3) the DRA should have been estopped from denying the accuracy of the $113 million PILOT valuation. The Supreme Court concluded after review that the BTLA's determination that it was proper for the DRA to use the utility tax appraisal in performing its statutory duties under RSA 21-J:3, XIII was reasonable, particularly given that neither unincorporated place had fulfilled its own statutory duty to appraise the Windpark for property tax purposes, and that the DRA was statutorily obligated to conduct a utility tax appraisal. The Court agreed with the CCC that the BTLA erred in denying their motion to compel production of the DRA's utility tax appraisal of the Windpark. For those reasons, the BTLA erred in denying the CCC's motion to compel disclosure of the Windpark's utility tax appraisal: "While we agree that the CCC had the burden to prove at the hearing that the equalized valuations were disproportionate and unjust, we find that the BTLA's refusal to compel disclosure of the Windpark appraisal prevented the CCC from having a fair opportunity to meet this burden. Accordingly, we conclude that the CCC did not receive a fair hearing before the BTLA, as it did not have an opportunity to present evidence to challenge or otherwise discredit the valuation arrived at on the utility tax appraisal." The BTLA found that "[n]othing in the minutes of the December, 2007 meeting or anything that occurred thereafter indicates an express or implied promise by the DRA that the Windpark would be valued at any fixed and unchanging amount (such as $113 million) for any purpose or length of time." The BTLA's decision was supported by the evidence, and accordingly the BTLA did not err in finding that this statement could not reasonably have been relied upon by the CCC as a commitment by the DRA that $113 million would be the true market value of the Windpark. Accordingly, the BTLA did not err in rejecting this argument. View "Appeal of Coos County Commissioners" on Justia Law

Appellants appealed a Commonwealth Court decision which considered the application of personal income tax (PIT) to various nonresidents, who invested as limited partners in a Connecticut limited partnership, which existed for the sole purpose of owning and operating a skyscraper in Pittsburgh, which ultimately went into foreclosure in 2005. The Commonwealth Court held that the partnership was subject to PIT commensurate with the total debt discharged as a result of the foreclosure, and therefore the nonresident limited partners were liable for PIT in an amount proportionate with their shares in the partnership. The Partnership incurred net operating losses for accounting, federal tax, and PIT purposes in every year of its existence. For PIT purposes, the Partnership allocated those losses to Appellants (and all of the other limited partners) and, because Appellants had no Pennsylvania-based income for 1985-2004, they did not file Pennsylvania PIT returns for those years. By June 30, 2005, the compounded, accrued interest totaled $2.32 billion, thus making the total liability on the Purchase Money Note more than $2.6 billion. When the Note matured given the insurmountable debt that had accrued, the Partnership was unable to sell the Property. Accordingly, the lender foreclosed, and, because the Partnership no longer owned the Property, the Partnership soon after liquidated. None of the limited partners, including Appellants, received any proceeds from the Property’s foreclosure or the Partnership’s liquidation, and therefore lost their entire investments in the Partnership. Following the Property’s foreclosure, but prior to the Partnership’s liquidation, the Partnership reported a gain as a result of the foreclosure on its federal and state tax filings that consisted of the unpaid balance of the Purchase Money Note’s principal and the accrued, compounded interest. Despite their individual investment losses, the Pennsylvania Department of Revenue assessed PIT against Appellants, plus interest and penalties, related to the foreclosure on the Property for the 2005 tax year. The Supreme Court empathized with Appellants who found "themselves with significant financial burdens because of the loss of their investments, the liquidation of the Partnership, and the foreclosure of the Property." Nevertheless, the assessment of PIT by the Department was proper, as a matter of constitutional, statutory, and regulatory law. Therefore, the Court affirmed the order of the Commonwealth Court sustaining the assessment of PIT. View "Wirth v. Pennsylvania " on Justia Law