Justia Tax Law Opinion Summaries

In this case, Metro disputed the determination of a deficiency by the Commissioner based on Metro's use of net operating losses (NOLs) accumulated in 2003 and 2004 to completely offset its 2002 taxable income. The court held that the plain meaning of the term "carryovers" prevented taxpayers from using NOLs that were carried back to 2001 or to 2002 from a later tax year to take advantage of section 56 of the Internal Revenue Code (the Relief Rule), which permitted taxpayers subject to the Alternative Minimum Tax to offset up to 100% of their taxable income with NOLs. Therefore, the court affirmed the Tax Court's assessment of a deficiency, because Metro could not take advantage of the Relief Rule with NOLs it carried back from the 2003 and 2004 tax years to 2002. View "Metro One Telecommunications, v. CIR" on Justia Law

Defendant was convicted of one count of attempting to evade or defeat a tax; four counts of willful failure to file a tax return; and one count of attempting to interfere with the administration of internal revenue laws. Defendant appealed. Although the court granted defendant's motion to reconsider the clerk's denial of his motion to extend the time for filing a reply and allowed the brief to be submitted to the court, the court nevertheless concluded that the district court did not err in any respect. Because the court held that there were no merits to any of defendant's substantive points, and because the court held that the statute of limitations accrued from the last evasive act under 26 U.S.C. 6531(2), the court affirmed the judgment. View "United States v. Irby, Jr." on Justia Law

An underground mine with surface facilities located in Musselshell County (Musselshell) extended underground into Yellowstone County (Yellowstone) and produced coal mined from both Musselshell and Yellowstone. Based upon a report of the counties from which the coal was mined, the Department of Revenue allocated approximately two-thirds of the mine's taxable coal gross proceeds to Musselshell, for a tax of $328,617, and the remainder to Yellowstone, for a tax of $126,909. Musselshell sued Yellowstone and the Department seeking a declaratory judgment that the Department wrongfully allocated a portion of the tax to Yellowstone. The district court upheld the Department's apportionment of the tax between the two counties, holding that Montana law contemplates taxation of the gross proceeds of coal in the county where the coal is mined and that the Department was not required to adopt administrative rules prior to apportioning the tax. The Supreme Court affirmed, holding that the Department correctly apportioned the coal gross proceeds tax from the mine between Musselshell and Yellowstone and was not required by law to create an administrative rule before making that apportionment. View "Musselshell County v. Yellowstone County" on Justia Law

The issue before the Supreme Court in this case was whether an ordinance imposing a fixed tax on businesses with gross receipts over a certain threshold violated a statute prohibiting business privilege taxes "on gross receipts or parts thereof." Appellants argued that, because the ordinance imposed a flat tax for businesses earning over $1,000,000, while exempting businesses with gross receipts below that amount, it constituted a tax "on gross receipts or part thereof." The common pleas court upheld the ordinance, explaining that it imposed a flat tax with an exemption for any business earning no more than $1,000,000 in a particular year. Thus, because the tax is not levied as a percentage of a business's gross receipts, the court reasoned that it does not constitute an improper tax "on" gross receipts. The Commonwealth Court affirmed in an unpublished disposition, rejecting Appellants' contention that the ordinance levied a tax on that part of a taxpayer's annual gross receipts in excess of $1,000,000. After its review, the Supreme Court concluded that, regardless of how well intentioned, the taxing authority's actions were contrary to statute. Accordingly the order of the Commonwealth Court was reversed, and the matter was remanded for entry of judgment in favor of Appellants. View "Shelly Funeral Homes v. Warrington Twp." on Justia Law

The Oklahoma Tax Commission appealed a ruling by the District Court of Grady County which found a decedent's outstanding 1978-1985 income tax liability was barred from collection through Decedent's probate case. The trial court's ruling was based on the ten-year limitation imposed by 68 O.S. 2001 section 223(A). The Court of Civil Appeals reversed, concluding the statute operated as a statute of limitations and did not violate the Oklahoma Constitution. The Court also found that the Oklahoma probate code required satisfaction of the tax debt before distribution of the estate assets. The decedent's estate appealed that ruling. Upon review, the Supreme Court found that the appellate court correctly held that 68 O.S. 2001 section 223(A) was a statute of limitations and did not extinguish an underlying debt to the state in violation of the Oklahoma Constitution. However, the Court concluded that neither 58 O.S. 2001 section 591 nor 58 O.S. 2001 section 635 of the probate code require payment of a debt otherwise barred by the statute of limitations. View "In the matter of the Estate of Bell-Levine" on Justia Law

Plaintiff-Appellant Ada Electric Cars, LLC filed suit against Defendants-Appellees Thomas Kemp Jr., Jerry Johnson, Dawn Cash, and Rick Miller, members of the Oklahoma Tax Commission (OTC), in their individual capacities, in response to the OTC's denial of a statutory tax credit for certain models of Tomberlin low-speed electric vehicles (LSVs) sold by the Appellant to its customers. The statutory tax credit provided for a one-time credit against income tax for investments in qualified electric motor vehicle property. The dispositive issue presented to the Supreme Court was whether Appellees were entitled to qualified immunity from suit for their determination that LSVs sold by Appellant did not qualify for the tax credit. Upon review, the Supreme Court concluded that Defendants did qualify for immunity, and affirmed the trial court's judgment. View "Ada Electric Cars, LLC v. Kemp" on Justia Law

Petitioner, a national satellite television provider, purchased equipment used to deliver programming to its customers. Between March 2000 an February 2004, Petitioner did not pay sales or use taxes on its equipment purchases from manufacturers, and instead, collected sales taxes from its customers at the time the equipment was leased to them. Following an audit in 2005, the Department of Taxation and Finance issued a notice of determination assessing Petitioner an additional $1.8 million in use taxes in use taxes for the same period on the basis that Petitioner owed taxes at the time it purchased the equipment from manufacturers. The Tax Appeals Tribunal upheld the notice of determination. The Appellate Division confirmed the Tribunal's determination. The Court of Appeals reversed, holding that Petitioner's purchases of equipment used to deliver programming to its customers were exempt from sales and use taxes under New York's Tax Law. View "EchoStar Satellite Corp. v. State Tax Appeals Tribunal" on Justia Law

Appellant operated an herbicide and pesticide manufacturing plant. After a tax audit, the director of revenue issued Appellant use tax assessments on its chemical purchases for its Missouri plant that covered tax period July 1, 2000 through December 31, 2001. Appellant appealed the assessments to the administrative hearing commission, claiming that it was entitled to tax exemptions available to a material recovery processing plant. The commission determined that Appellant's chemical plant did not qualify as a material recovery processing plant for purposes of applying the claimed tax exemptions. The Supreme Court affirmed, holding that the commission did not err in rejecting Appellant's claims that it was entitled to tax exemptions related to operation of a material recovery processing plant. View "BASF Corp. v. Dir. of Revenue" on Justia Law

Defendant Skoshi Farr was convicted by a jury of violating 26 U.S.C. 7201 for willfully failing to pay a trust fund recovery penalty that the Internal Revenue Service assessed against her after she, as the manager of an alternative medical clinic, failed to pay quarterly employment taxes owed by the clinic. Defendant appealed her conviction, contending she was denied her Sixth Amendment right to a fair trial by the district court's rulings which permitted the admission of certain Rule 404(b) evidence. She also contended the district court erred in denying her motion for judgment of acquittal, which argued that the government's evidence was insufficient to support a conviction, and in denying her motion to dismiss the indictment for failure to charge the offense under the appropriate statute. Finally, Defendant contended her prosecution in this case was barred by the Double Jeopardy Clause as a result of the government's prior unsuccessful prosecution. Upon review of the case and the applicable statutory authority, the Tenth Circuit concluded that Defendant's arguments lacked merit, and affirmed her conviction. View "United States v. Farr" on Justia Law

Defendants Michael Powers and John Mahan, who ran an employment agency supplying temporary workers, were convicted after a jury trial of conspiracy to defraud the United States by impeding the functions of the IRS and mail fraud. Powers was also convicted of subscribing false tax returns and Mahan of procuring false tax returns. The tax fraud amounted to $7.5 million. Powers was sentenced to eighty-four months' imprisonment and Mahan to a term of seventy-six months. Defendants' appealed, alleging that the trial court committed errors requiring a new trial. The First Circuit Court of Appeals affirmed Defendants' convictions and sentences, holding (1) there was no prejudice to Defendants in the trial court's failure to give an defense instruction on advice of counsel; (2) various witnesses were not allowed to testify as to the ultimate issues, and thus the role of the jury was not invaded; (3) defense counsel was afforded a reasonable opportunity to impeach adverse witnesses; and (4) the district court did not plainly err in excluding testimony by Defendants' witnesses. View "United States v. Mahan" on Justia Law