Justia Tax Law Opinion Summaries

Appellant traveled from South Korea to the United States and, while present in the United States, he gambled at slot machines frequently. The IRS contended that appellant must pay taxes on every winning pull at the slot machine and appellant disputed that interpretation pursuant to Tax Code 871, arguing that the IRS should calculate his winnings on at least a per-session basis. The court concluded that Section 871 allowed non-resident aliens, such as appellant, to calculate winnings or losses on a per-session basis. Accordingly, the court reversed the judgment of the Tax Court and remanded to the Tax Court so the parties could determine the proper amount of appellant's tax liability. View "Park, et al. v. Commissioner of IRS" on Justia Law

Petitioner challenged the IRS's determination that the gross income petitioners reported in 2003 and 2004 based on their ownership of a controlled foreign corporation should have been taxed at the rate of petitioners' ordinary income rather than the lower tax rate they had claimed. At issue was whether amounts included in petitioners' gross income for 2003 and 2004 pursuant to 26 U.S.C. 951(a)(1)(B) and 956 (collectively, "section 951 inclusions") constituted qualified dividend income under 26 U.S.C. 1(h)(11). The court concluded that section 951 inclusions did not constitute actual dividends because actual dividends required a distribution by a corporation and receipt by a shareholder and these section 951 inclusions involved no distribution or change in ownership; Congress clearly did not intend to deem as dividends the section 951 inclusions at issue here; and petitioners' reliance on other non-binding sources were unavailing. Accordingly, the court affirmed the judgment of the tax court. View "Rodriguez, et al. v. Commissioner of Internal Revenue" on Justia Law

Ryan failed to pay federal income taxes 2006-2010 and owed $136,898.93. In 2011, the IRS recorded a tax lien, 26 U.S.C. 6326. Ryan filed a voluntary Chapter 13 bankruptcy petition, 11 U.S.C. 1301. He had personal possessions worth $1,625. He admitted to the tax liabilities, and alleged that his residence had been sold for delinquent real estate taxes and that he did not own a bank account, vehicle, or retirement account. In an adversary proceeding, he alleged that the secured claim for 2009 taxes was limited $1,625 and that the remaining claim was unsecured, 11 U.S.C. 506(a), and void, 11 U.S.C. 506(d). The bankruptcy court held that section 506(d), as interpreted by the Supreme Court, did not allow Ryan to void, or “strip down” the lien. The Seventh Circuit affirmed. Section 506(d) provides: To the extent that a lien secures a claim that is not an allowed secured claim, such lien is void, unless such claim was disallowed only under section 502(b)(5) or 502(e) or such claim is not an allowed secured claim due only to failure to file a proof of such claim. “Allowed secured claim” in 506(d) is not defined by 506(a), but means a claim that is allowed under 502 and secured by a lien enforceable under state law. View "Ryan v. United States" on Justia Law

In consolidated cases, the common issue centered on whether Vermont laws allowed the Town of Colchester to consider certain intangible factors in assessing seasonal lakefront camps located on leased land. The Supreme Court held that the Town was not precluded from considering such factors in assessing properties. View "Lesage v. Town of Colchester" on Justia Law

Respondent owned four parcels of real property in Clark County. Respondent challenged the Clark County Assessor's assessment for the tax year 2011-2012 with the County Board of Equalization, which lowered the valuation. Clark County in turn appealed the revised assessment to the State Board of Equalization, which increased the valuation. Respondent ultimately petitioned the district court in Carson City for judicial review. Clark County and the Assessor filed a motion for change of venue, contending that the action should be maintained in the district court in Clark County because Respondent's property was located outside of Carson City. The district court denied the motion. The Supreme Court affirmed, holding (1) the statute provides that a property owner with property located in any county in the State may file a property tax valuation action in any district court in the state; and (2) the Carson City district court was an appropriate venue for filing the property tax valuation challenge because it was a court of competent jurisdiction as required by Nev. Rev. Stat. 361.420(2). View " County of Clark v. Howard Hughes Co., LLC" on Justia Law

Taxpayer was a trust fund that purchased property in Ramsey County. Taxpayer sought an exemption from taxation for the property on the basis that it was a "seminary of learning" and therefore exempt under Minn. Stat. 272.02(5). The County allowed an exemption for several years but later determined that the property was no longer exempt and assessed the property. Taxpayer subsequently filed a petition challenging the assessment. After the tax court denied Taxpayer's motion to amend or supplement its petition, Taxpayer sought certiorari review. The Supreme Court dismissed the writ of certiorari, holding that it lacked jurisdiction because the tax court's order was not reviewable either as a final order under Minn. Stat 271.10 or in the interests of justice under Minn. R. App. P. 105.01. View "Metro. Sheet Metal Journeyman & Apprentice Training Trust Fund v. County of Ramsey" on Justia Law

Plaintiff was the administratrix of a Massachusetts estate appointed by a Massachusetts court. Part of the estate was a parcel of real property located in Maine that was later sold. The estate and the IRS agreed to value the back parcel at $950,000. Plaintiff later filed an amended Maine estate tax return, but insufficient funds remained in the estate to pay the Maine assessment. Plaintiff received a notice of assessment for Maine estate tax informing her that, as the estate's personal representative, she was personally liable for the money owed by the estate. Upon Plaintiff's request for reconsideration, the Assessor upheld an adjusted assessment of $98,180. The superior court vacated the Assessor's decision, concluding that the Assessor lacked jurisdiction to impose personal liability for unpaid estate taxes on a personal representative appointed by an out-of-state court to administer a foreign estate. The Supreme Court vacated the superior court's judgment and remanded for entry of judgment against Plaintiff, holding that Maine tax law provides the Assessor with the authority to hold a personal representative appointed by an out-of-state court personally liable for unpaid Maine estate taxes resulting from the sale of real property located in Maine. View "Metcalf v. State Tax Assessor" on Justia Law

CSX, an interstate rail carrier, filed suit challenging Alabama's sales and use taxes. At issue was whether exempting CSX's main competitors from Alabama's sales tax was discriminatory as to rail carriers in violation of the Railroad Revitalization and Regulation Reform Act of 1976 (4-R Act), 49 U.S.C. 11501(b)(4). After establishing a comparison class of competitors and showing that its competitors did not pay the sales tax on diesel fuel purchases, CSX made a prima facie showing of discrimination under section 11501(b)(4). Alabama then failed to meet its burden by showing a "sufficient justification" for the exemptions. Accordingly, the court reversed the judgment of the district court, holding that Alabama's sales tax violated the 4-R Act, and remanded to the district court with instructions to enter declaratory and injunctive relief in favor of CSX. View "CSX Transp., Inc. v. AL Dept. of Revenue, et al." on Justia Law

A government contractor (HCSC) contracted with the federal government to administer two health insurance programs. HCSC incurred expenses while performing the contracts that were reimbursed by the government. After the Comptroller denied HCSC's request for a refund for some of the sales and use taxes it paid on the expenses, HCSC brought tax-refund suits, claiming the purchases it made to administer the health-insurance programs qualified for the Tax Code's sale-for-resale exemption, which grants purchasers of taxable goods and services a sales-tax exemption if they resell the items. The lower courts determined HCSC was entitled to the claimed refunds. The Supreme Court affirmed on all but one issue, holding (1) the exemption applied to HCSC's requested refunds for tangible personal property and taxable services; but (2) the exemption did not apply to HCSC's requested refunds for leases of tangible of personal property. Remanded. View "Combs v. Health Care Servs. Corp." on Justia Law

Vanderminden, a Family Limited Partnership, owned a contiguous piece of property in the adjoining towns of Poultney and Wells. The Wells portion was at issue in this case: the state appraiser affirmed the Town's valuation of the property. On appeal, the partnership argued that the appraiser failed to supply a sufficient explanation for its decision to accept the Town's valuation; in assessing the Wells and Poultney properties as a single parcel then valuing the Wells portion as a seasonal dwelling; and for not accepting the partnership's evidence that the Wells portion was assessed above fair market value of the entire parcel. Upon review, the Supreme Court concluded that the valuation of a single property in more than one town includes both the fair market value of the entire parcel, and of the portion in the town involved in the appeal. Because the partnership presented evidence to demonstrate that the Wells portion's valuation exceeded the fair market value of the entire parcel, Wells' appraisal should have been reduced accordingly. Furthermore, the state appraiser should have given its reason for the high valuation. Accordingly, the Court remanded the case for further proceedings. View "Vanderminden, A Family LTD Partnership v. Town of Wells" on Justia Law