Justia Tax Law Opinion Summaries

The Surface Mining Control and Reclamation Act, 30 U.S.C. 1201, imposes a fee to underwrite the costs of restoring lands damaged by mining. The fee is 28 cents per ton of coal produced by surface mining and the lesser of 12 cents per ton produced by underground mining, or 10 percent of the value of the coal at the mine. The reclamation fee for lignite coal is the lesser of eight cents per ton or two percent of the value of the coal at the mine. Lignite coal produces less than 8,300 British thermal units per pound, less energy than produced by bituminous, subbituminous, and anthracite coal. In the area of Wyodak’s strip mine near Gillette, Wyoming, coal transitions from subbituminous to lignite in the seams. The end product of the mine’s process is a mixture of subbituminous and lignite coal. Wyodak paid the higher reclamation fee for non-lignite coal. In 2005, Wyodak‘s consultant estimated that 12 percent of its coal was lignite and 88 percent was higher quality. The Office of Surface Mining denied a requested refund. The Claims Court first rejected claims not arising within six years of the filing date, then denied relief, holding that the fee is on coal as extracted. Because the BTU value of the blend was higher than 8300 BTUs per pound, Wyodak was not entitled to a refund for any lignite in the mix. The Federal Circuit reversed and remanded, noting that Wyodak had the burden of proving entitlement to and the amount of any refund. View "Wyodak Res. Dev. Corp. v. United States" on Justia Law

In 2007, the Nevada Tax Commission (NTC) promulgated Nev. Admin. Code 361.61038, which set forth an apportionment formula for calculating remainder-parcel property values for purposes of Nev. Rev. Stat. 361.4722. Respondent owned a parcel that was divided from a larger piece of land before the regulation's enactment and was properly characterized as a "remainder parcel" under section 361.4722(6). Appellant, the county assessor, valued the land under the approach he used before section 361.61038 was enacted. Respondent appealed, seeking application of the new regulation's apportionment formula. The NTC upheld the assessor's valuation and declined to apply its new regulation retroactively. The district court reversed the judgment of the NTC and directed it to apply section 361.61038 to Respondent's remainder parcel. The Supreme Court reversed, holding that, in this case, (1) application of the regulation would be impermissibly retroactive; and (2) the methods the assessor used did not violate the Constitution. View "County of Clark v. LB Props., Inc." on Justia Law

In 2009, Debtor had received an IRS Notice of Deficiency for tax year 2004, claiming additional taxes of $143,445.00, plus penalties of $28,689.00. Debtor filed a voluntary Chapter 7 petition in 2011. In 2011, Debtor received a Notice of Deficiency for tax years 2007 and 2008 claiming that $138,907.00 in additional taxes for 2007, plus penalties of $27,781.40, and an additional $109,648.00 in taxes for 2008, plus penalties of $21,929.60. Debtor challenged the notices. The Tax Court dismissed with respect to the notices for 2007-2008 because of the automatic stay. Post-petition, the Debtor received a $86,512.32 tax refund, based on his 2005 tax return. The Trustee claimed the refund, but Debtor returned the check to the IRS. The Trustee sought turnover of the refund; Debtor objected. The IRS tendered a check for $32,555.15 to Debtor, relating to 2005 taxes, which was received by the Trustee. Debtor sought a determination of tax liability pursuant to 11 U.S.C. 505(a)(1) and turnover of funds if the IRS’s claim was disallowed. The bankruptcy court held that the IRS’s claim of $226,142.85, pertaining to 2004 taxes, was nondischargeable and that the tax refund check for $86,512.32, which erroneously issued to the Debtor, was not property of the estate. The Sixth Circuit Bankruptcy Appellate Panel reversed as to priority and nondischargeability, because the lower court did not address the limitations period. View "In re: Winter" on Justia Law

In 2006, the Department of Revenue issued a notice of deficiency against Tektronix, Inc. for $3.7 million in additional tax for the 1999 tax year. Tektronix contended that: (1) the statute of limitations barred the department from assessing that deficiency; and (2) the department had incorrectly calculated its tax liability. The Tax Court granted partial summary judgment for Tektronixs on both grounds. The Department appealed that decision. Finding that the Department indeed incorrectly calculated taxpayer's tax liability, and the Supreme Court affirmed the Tax Court. View "Tektronix, Inc. v. Dept. of Rev." on Justia Law

After completing an audit of Taxpayers' joint income tax returns, the Commissioner of Revenue issued an order assessing additional taxes. That day, a revenue tax specialist sent Taxpayers an e-mail informing them of the existence of the order. The order was attached to the e-mail. Taxpayers claimed to have been unable to open the attachment containing the letter until sixty-six days after receiving the e-mail. The specialist claimed that he also sent the order by regular mail to Taxpayers' home address, but Taxpayers contended that a mailed copy of the order never arrived. Fifty-three days after Taxpayers opened the e-mail attachment and 119 days after they received the e-mail, Taxpayers filed an appeal with the tax court. The tax court dismissed the appeal as untimely, as it was filed after the sixty-day statutory deadline. The Supreme Court affirmed, holding (1) the tax court's findings that sending the order to Taxpayers electronically and by regular mail was sufficient were not clearly erroneous; and (2) the methods by which the Commissioner sent the order did not violate Taxpayers' due process rights. View "Turner v. Comm'r of Revenue" on Justia Law

Entergy filed suit against Vermont seeking a declaratory judgment that Vermont's Electrical Energy Generating Tax was unconstitutional. On appeal, Entergy challenged the district court's grant of Vermont's motion to dismiss based on lack of subject matter jurisdiction. At issue was whether the Tax Injunction Act, 28 U.S.C. 1341, denied the federal courts jurisdiction to review Entergy's challenges to the Generating Tax. The Act prohibits federal courts from interfering with state taxation schemes so long as the state courts offer an adequate forum to litigate the validity of the tax. The court concluded that the Act applied to the Generating Tax and that Vermont provided a plain, speedy, and efficient mechanism for raising Entergy's objections to the validity of the tax. Accordingly, the court affirmed the judgment of the district court. View "Entergy Nuclear v. Shumlin" on Justia Law

The taxpayers in this case were out-of-state natural gas marketing companies, out-of-state local distribution companies that were certified as public utilities in their states, and out-of-state municipalities. Each taxpayer bought natural gas from producers or other marketers then delivered it to pipelines under contracts allowing the taxpayers to withdraw equivalent amounts of gas at a later time from out-of-state distribution points. The taxpayers filed requests for ad valorem tax exemption, claiming the natural gas was exempt under Kan. Const. art. 11, 1, which exempts merchants' inventory from ad valorem taxation but does not exempt tangible personal property owned by a public utility. The Kansas Court of Tax Appeals determined the natural gas was not exempt because the taxpayers were public utilities pursuant to Kan. Stat. Ann. 79-5a01. The Supreme Court held (1) the taxation at issue did not violate the Commerce Clause or the Due Process Clause of the U.S. Constitution; (2) section 79-5a01 was constitutional as applied to the out-of-state local distribution companies; but (3) section 79-5a01 was unconstitutional as applied to the out-of-state natural gas marketing companies and those taxpayers that were out-of-state municipalities because those entities were not public utilities under the meaning of the statute. View "In re Property Valuation Appeals of Various Applicants" on Justia Law

Plaintiff, a Delaware LLC operating in Montana, purchased a cable television network infrastructure in Montana in 2003. In 2010, Plaintiff filed a declaratory judgment action in response to certain actions taken by the State of Montana Department of Revenue. Specifically, Plaintiff sought (1) to prevent the Department from issuing revised assessments of Plaintiff for tax years 2007 through 2009 and to prevent the Department from issuing any other revised assessments, and (2) a declaration that the Department had illegally assessed all of Plaintiff's property as class thirteen property. The district court granted summary judgment for Plaintiff on the Department's ability to issue retroactive assessments and directed the Department to refund with interest the payments that Plaintiff had made under protest. The Supreme Court reversed, holding that the district court erred in concluding (1) Plaintiff owned exclusively class eight property because, under Montana law, Plaintiff was subject to assessment under class thirteen; and (2) the Department lacked authority to issue revised assessments for Plaintiff's property for tax years 2007 through 2009 where the Department's discovery and subsequent reclassification arose from the audit's revelation of inaccuracies in Plaintiff's self-classification. View "Bresnan Commc'ns, LLC v. Mont. Dep't of Revenue" on Justia Law

The United States filed suit against Kathleen Haag and her husband seeking to reduce to judgment federal income tax liabilities for several years. The district court granted summary judgment to the United States, concluding that Haag's claim that she was entitled to "innocent spouse" relief was barred by the two-year limitations period. The First Circuit Court of Appeals affirmed. Haag eventually filed a fourth suit asserting that Lantz v. Commissioner had invalidated the two-year limitations period on requests for innocent spouse relief. The tax court and First Circuit held that res judicata applied. At this point, Lantz had been reversed, but the IRS had issued Notice 2011-70, which stated that taxpayers whose innocent spouse relief claims had been litigated previously and barred by the statute of limitations would not be subject to collection under certain circumstances. The First Circuit concluded that Notice 2011-70 did not apply to Haag. Haag then filed this complaint, arguing that Notice 2011-70 afforded her equitable relief from the judgment and that the First Circuit's prior finding to the contrary was mere dicta. The district court dismissed the case for failure to state a claim. The First Circuit affirmed, concluding, once again, that Notice 2011-70 was inapplicable to Haag. View "Haag v. United States" on Justia Law

This case concerned Merit Energy Company's 2006 natural gas severance and ad valorem tax liability for wells located in several counties. Merit was a take-in-kind interest owner, which is a party who elects to take a portion of the mineral produced rather than receive monetary remuneration for its share of the production. The State Board of Equalization (SBOE) determined that Merit failed to timely appeal several final Wyoming Department of Revenue (DOR) decisions regarding the amount of taxable gas it had received and dismissed Merit's appeal. The district court affirmed. The Supreme Court affirmed, holding (1) the district court did not err in affirming the SBOE's dismissal as untimely; and (2) even if the Court permitted Merit to appeal the notice of valuation change sent by the DOR, the doctrine of collateral estoppel precluded Merit from doing so. View "Merit Energy Co. v. Dep't of Revenue" on Justia Law