Justia Tax Law Opinion Summaries

Plaintiffs, American citizens, had bank accounts in UBS, Switzerland’s largest bank, in 2008 when the UBS tax-evasion scandal broke. The accounts were large and the plaintiffs had not disclosed the existence of the accounts or the interest earned on the accounts on their federal income tax returns, as required. Pursuant to an IRS amnesty program, they disclosed the interest and paid a penalty. They brought a class action to recover from UBS the penalties, interest, and other costs, plus profits they claim UBS made from the class as a result of the fraud and other wrongful acts. The Seventh Circuit affirmed dismissal, noting that the “plaintiffs are tax cheats,” and rejecting an argument that UBS was obligated to give them accurate tax advice and failed to do so. Plaintiffs did not argue that they asked UBS to advise them on U.S. tax law or that the bank volunteered advice. The court stated that: “This is like suing one’s parents to recover tax penalties one has paid, on the ground that the parents had failed to bring one up to be an honest person who would not evade taxes.” The court noted, but did not decide, choice of law issues. View "Thomas v. UBS AG" on Justia Law

At issue in this case was the valuation and corresponding tax assessment of seventy-nine condominium units owned by Pope Properties / Charleston LLC (Pope Properties). The Kanawha Assessor determined that for ad valorem tax purposes for 2011, the seventy-nine units should be valued as follows: $63,700 for each of Pope Properties' sixteen one-bedroom units and $70,000 for each of its sixty-three two-bedroom units. The Board of Equalization and Review upheld the determination. Pope Properties appealed, contending that the units should be valued at $42,000 for each of the one-bedroom units and $49,000 for each of the two-bedroom units. At issue on appeal was the Assessor's use of the market data approach in determining the value of the units rather than the income approach to valuation advocated by Pope Properties. The circuit court affirmed the Board's decision. The Supreme Court affirmed, holding that the Assessor did not err in choosing or applying the market data approach in this case. View "Pope Props. / Charleston LLC v. Kanawha County Assessor " on Justia Law

In 1995, Katelyn Janson was severely injured in an automobile accident. A lawsuit ended with a settlement in which two annuities were established, both of which guaranteed payments to Katelyn starting in 2001 and established that, if Katelyn died before fifteen years expired, annuity payments would be made to her estate. Katelyn's mother and conservator, Candy Bradison, moved Katelyn to Wyoming in 2001 and to Minnesota in 2003. In 2006, Katelyn died. In 2010, Bradison sought, on behalf of Katelyn's estate, a refund of the amount the estate previously paid to the Minnesota Department of Revenue, arguing (1) the annuity payments were not includable in Katelyn's estate because Katelyn did not own the annuities; and (2) Katelyn was a Wyoming domiciliary at the time of her death. The tax court concluded (1) Katelyn was a Minnesota domiciliary at the time of her death; and (2) the annuity payments were includable in Katelyn's estate. The Supreme Court affirmed, holding (1) Katelyn's intangible property had a situs in Minnesota at the time of her death and could be taxed in accordance with Minnesota's estate tax provisions; and (2) Katelyn was the beneficial owner of the annuity payments, and the value of the payments was properly included in her estate. View "Bradison vs. Comm'r of Revenue" on Justia Law

The issue before the Supreme Court in this case concerned the question of when tax liability for property is determined. Appellant Hampton Friends of the Arts challenged the Administrative Law Court's (ALC) finding that real property it acquired in March 2008 was subject to 2008 property taxes because the property was subject to taxes on December 31, 2007. Appellant contended that, as a non-profit corporation, it was entitled to a property tax exemption for the 2008 tax year. The Supreme Court disagreed and affirmed the ALC: "pursuant to settled law, the 2008 tax status of the Hampton County property was determined on December 31, 2007. Because the property was subject to property taxes as of December 31, 2007, the property is subject to 2008 property taxes." View "Hampton Friends v. So. Carolina Dept. of Revenue" on Justia Law

Petitioner, a tenant-stockholder of a cooperative housing corporation, appealed from the tax court's denial of her petition for a redetermination of a deficiency determination by the Commissioner. The tax court granted the Commissioner's motion for summary judgment, ruling that petitioner held no property interest in the cooperative's grounds sufficient to entitle her to the claimed deduction. The court concluded that petitioner had a sufficient interest in "property" within the meaning of 165(c)(3), and the Commissioner's arguments in support of the tax court's ruling were without merit. Accordingly, the court vacated and remanded for further proceedings. View "Alphonso v. Commissioner of Internal Revenue" on Justia Law

In 2010, Hebron Academy requested a tax abatement from the Town for the 2009 tax year. Because the Academy did not file the abatement request before the statutory deadline, the Town denied the request. The Board of Assessment Review denied the request on the same ground. The Academy subsequently filed a complaint seeking a declaratory judgment that its properties were exempt from taxation and that the Town must reimburse it for real estate taxes it paid on its exempt properties for the prior three years. The superior court declared that the Academy was entitled to the exemption for most of its property but that res judicata precluded the court from relieving it of its obligation to pay the 2009 taxes at issue. The Supreme Court affirmed, holding (1) Hebron Academy, as a literary and scientific institution, was entitled to a tax exemption for its real estate "owned and occupied or used solely for [its] own purpose"; and (2) the trial court correctly concluded that res judicata precluded the declaratory judgment from applying to the 2009 tax year because an administrative adjudication had been rendered on the merits of the case. View "Hebron Academy, Inc. v. Town of Hebron" on Justia Law

The Supreme Court granted certiorari in order to determine whether the court of appeal erred in overturning the rulings of the district courts with regard to certain tax assessments. Questions were raised as to whether review by the Court and the court of appeal was timely. Because the Supreme Court determined that the application in "Caldwell Parish School Board, 12-C-1383," was untimely filed, and the underlying appeal to the court of appeal in "Tensas Parish School Board, 12-C-1762," was also untimely filed, the Court found it lacked jurisdiction to consider the validity of the decision of the court of appeal in "Caldwell Parish School Board," and the district court judgment in "Tensas Parish School Board" was final and definitive. View "Caldwell Parish Sch. Bd. v. Louisiana Machinery Company, LLC" on Justia Law

Defendant Patrick Merrill Brody was convicted, after a jury trial, of willful failure to file a tax return in 2001. He was sentenced to ten months' imprisonment and filed this appeal to challenge both his conviction and sentence. Primary among the arguments Defendant raised on appeal was the insufficiency of the evidence presented against him at trial and that the trial court erred in calculating his sentence. Finding the evidence sufficient to support the sentence the trial court correctly calculated, the Tenth Circuit affirmed Defendant's conviction and sentence. View "United States v. Brody" on Justia Law

Taxpayer, a Maryland resident, appealed an assessment by the State Comptroller that did not allow a credit against the county income tax portion of the Maryland income tax. Taxpayer's income consisted of significant "pass-through" income generated by a Subchapter S corporation in other states, which was apportioned to Taxpayer and taxed by the states in which it was generated. The tax court affirmed the assessment. The circuit court reversed and remanded for further factual development and "an appropriate credit for out-of-state income taxes paid" on the corporation's income. The Court of Appeals affirmed, holding that the failure of the Maryland income tax law to allow a credit against the county tax for a Maryland resident taxpayer with respect to pass-through income of an S corporation that arises from activities in another state and that is taxed in that state violates the dormant Commerce Clause of the federal Constitution. View "Md. State Comptroller v. Wynne" on Justia Law

In 2007, Brunswick County conducted an authorized appraisal of all property in the County. However, in 2008, which was not a statutorily designated year for setting property values for tax purposes, the County reassessed the tax value of real property belonging to Ocean Isle Palms LLC. Ocean Isle disputed the resulting tax values, arguing that the values were unlawful because they were based on an invalid reassessment. The County Board of Equalization and Review declined to change the valuations. On appeal, the Property Tax Commission found the 2008 revaluation was unlawful and granted Ocean Isle's summary judgment motion. The court of appeals reversed. The Supreme Court reversed, holding that the reassessment conducted in the nonreappraisal year 2008 violated the relevant statutes, and the alteration of the taxable value of Ocean Isle's property under the 2008 reassessment was unlawful. View "In re Ocean Isle Palms LLC" on Justia Law