Justia Tax Law Opinion Summaries

The Supreme Court reversed the judgment of the circuit court denying a refund of Business and Professional Occupational License (BPOL) taxes Coxcom, LLC paid to Fairfax County on the grounds that the Internet Tax Freedom Act's (ITFA) grandfather clause permitted the County to impose the tax, holding that the grandfather clause did not apply.Since 2000, Cox had provided internet access service to customers in the County. In 2016, Cox filed a request for a BPOL tax refund for the tax years 2013 through 2015, asserting that the federal ITFA preempted the County from imposing the BPOL tax on internet access service revenues. The circuit court concluded that the BPOL tax qualified for the grandfather clause exemption. The Supreme Court reversed, holding (1) the circuit court correctly found that the ITFA applied to the County's BPOL tax; and (2) the grandfather clause did not rescue the County's imposition of a tax on internet access services. View "Coxcom, LLC v. Fairfax County" on Justia Law

Petitioner went to trial for three counts of tax fraud under 18 U.S.C. Sections 2 and 287 and one count of attempted tax evasion under 26 U.S.C. Section 7201. A jury convicted on all four counts, and he was sentenced to a period of incarceration, supervised release, and restitution. The district court vacated the convictions for the first three counts of tax fraud but left in place the fourth for tax evasion. Petitioner timely appealed, renewing his arguments that his counsel was ineffective 1) in failing to properly move for judgment of acquittal as to Count Four, 2) in calling him to the witness stand, and 3) in failing to advise him of the dangers of testifying in his own defense.   The Eleventh Circuit granted Petitioner’s habeas petition and vacated his conviction under Count Four for tax evasion. The court explained that as to Count Four for attempted tax evasion, the basic inquiry on the ineffective assistance of counsel claim is, whether Petitioner’s trial counsel was deficient in failing to move for judgment of acquittal under Fed. R. Crim. P. 29 after the Government’s presentation of its case-in-chief, and, if so, whether that deficiency prejudiced the outcome of the trial.   The court wrote that here Petitioner’s counsel’s performance was deficient because he failed to properly move for judgment of acquittal when the Government had not carried its evidentiary burden in its case-in-chief. Further, had Petitioner’s counsel properly moved for judgment of acquittal, the district court would have been legally required to grant it for the same reasons the Eleventh Circuit did under a de novo standard. View "Peter Hesser v. USA" on Justia Law

In these actions brought by tax sale buyers for declaratory and injunctive relief alleging that Maryland sheriffs exceeded their express and implied authority by adopting policies concerning how to execute writs of possession in tax sale foreclosure cases the Court of Appeals held that the sheriffs had the implied authority to adopt policies for how to serve writs of possession in such cases.This case involved a challenge to two policies used by sheriffs in evicting people from their homes when a tax sale buyer obtains a judgment foreclosing the right of reception with respect to a property and the homeowner does not redeem the property. Under the "mover policy," sheriffs require tax sale buyers to provide movers to remove personal property from the premises when serving writs of possession. Under the "weather policy," sheriffs postpone the service of writs of possession during bad whether conditions. The Supreme Court affirmed the lower courts' judgments in favor of the sheriffs, holding that, in the execution of writs of possession, both the mover policy and the weather policy constituted a valid exercise of powers daily implied by the sheriffs' expressly given duties and authority. View "Thornton Mellon LLC v. Frederick County Sheriff" on Justia Law

To dispute a property tax assessment under Detroit ordinances and Michigan state law, taxpayers “make complaint on or before February 15th" before the Board of Assessors. Any person who has complained to the Board of Assessors may appeal to the Board of Review. For the Michigan Tax Tribunal to have jurisdiction over an assessment dispute, “the assessment must be protested before the board of review.” On February 14, 2017, Detroit mailed tax assessment notices to Detroit homeowners, including an “EXTENDED ASSESSORS REVIEW SCHEDULE” that would conclude on February 18, just four days later. At a City Council meeting on February 14, the city announced: “The Assessors Review process will end this year February the 28th.” News outlets reported the extension and that Detroit had waived the requirement of appearance before the Board of Assessors so residents could appeal directly to the Board of Review. Detroit did not distribute individualized mailings to so inform homeowners.Plaintiffs filed a class action, alleging violations of their due process rights; asserting that Michigan’s State Tax Commission assumed control of Detroit’s flawed property tax assessment process from 2014-2017 so that its officials were equally responsible for the violations; and claiming that Wayne County is “complicit” and has been unjustly enriched. The district court dismissed for lack of subject matter jurisdiction, citing the Tax Injunction Act and the principle of comity. The Sixth Circuit reversed, finding that a state remedy is uncertain. View "Howard v. City of Detroit" on Justia Law

The Mobile County Board of Equalization ("the Board") petitioned the Alabama Supreme Court for a writ of mandamus directing the Mobile Circuit Court ("the trial court") to dismiss, for lack of subject-matter jurisdiction, an appeal filed by Atwood Drilling, Inc. ("Atwood"), challenging the Board's final assessment of ad valorem property taxes. This case concerns a dispute between Atwood and the Board as to the assessed value of personal property owned by Atwood ("the property"). Atwood timely filed a notice of appeal to the trial court, challenging the assessment as too high. the Board moved to dismiss Atwood's appeal, alleging: (1) taxes on the property had become delinquent because they had not been paid by January 1, 2021; and (2) by failing to pay the disputed amount before January 1, 2021, Atwood had not satisfied a jurisdictional requirement in § 40-3-25 -- specifically, the requirement that, when appealing a tax assessment, a taxpayer who has not executed a supersedeas bond must pay the assessed taxes before they become delinquent. In support of the motion to dismiss, the Board attached a receipt from the office of the Mobile County Revenue Commissioner ("the Commissioner") indicating that Atwood had not paid the assessed taxes as of January 19, 2021. Atwood alleged that it had sent the Commissioner via certified mail on December 10, 2020, and suggested that delivery had been likely delayed because of service disruptions related to the COVID-19 pandemic. The Board argued that the "mailbox rule" in § 40-1-45 did not extend to undelivered tax payments. At some point following the Board's filing of the motion to dismiss, Atwood paid the tax bill, including penalties and interest, with a second check. After holding several hearings on the matter, the trial court, without stating the findings on which its decision was based, entered an order denying the Board's motion to dismiss on September 10, 2021. Because the appeal was not perfected, the Alabama Supreme Court determined the trial court lacked subject matter jurisdiction, and should have granted the Board's motion to dismiss. The petition was thus granted and the writ issued. View "Ex parte Mobile County Board of Equalization." on Justia Law

The Internal Revenue Service is barred from issuing a summons “with respect to any person if a Justice Department [criminal] referral is in effect with respect to such person.” I.R.C. Section 7602(d)(1). The IRS issued a summons for information to Equity Investment Associates, LLC. (“Equity”). Equity sought to quash that summons, arguing that an existing criminal referral for its lone agent must be treated as a referral for Equity itself.   The Fourth Circuit rejected this argument and affirmed the district court’s judgment. The court held under Section 7602, a business entity is a distinct person from its agents. And because the court only look to whether the taxpayer itself has been referred to the Justice Department, Equity cannot quash the summons. Thus, the district court did not abuse its discretion when denying Equity’s motion for an evidentiary hearing. And because Equity cannot meet that lower burden, it cannot meet the “heavy burden of disproving the actual existence of a valid civil tax determination or collection purpose.” View "Equity Investment Associates, LLC v. US" on Justia Law

The Supreme Court reversed the judgment of the Board of Tax Appeals (BOTA) concluding that Johnson County's valuations for the 2016 and 2017 tax years involving eleven Walmart and Sam's Club "big box" stores in the County were too high because they improperly relied on unadjusted sales and rental income data from other properties subject to build-to-suit leases, holding that In re Prieb Properties, LLC 275 P.3d 56 (2012), is overruled.The BOTA in this case did its duty to follow Prieb, a 2012 decision that crafted a rule of law to exclude appraisal opinions founded on unadjusted build-to-suit lease data to support valuations used in the process of ad valorem taxation. The court of appeals affirmed. The Supreme Court remanded the case, holding (1) Prieb's rationale invades BOTA's longstanding province as the fact-finder in the statutory process for appraising real property at its fair market value for ad valorem tax purposes; and (2) by following Prieb, BOTA improperly imposed an exclusionary rule on the County's evidence rather than simply considering its weight and credibility. View "In re Equalization Appeal of Walmart Stores, Inc." on Justia Law

VanDemark owns the Used Car Supermarket, which sells cars from two lots in Amelia, Ohio. In 2013-2014, VanDemark funneled away his customers’ down payments and left them off his tax returns. He used this stashed-away cash to finance the mortgage on his mansion.The Sixth Circuit affirmed VanDemark’s convictions for helping prepare false tax returns, 26 U.S.C. 7206(2), structuring payments, 31 U.S.C. 5324(a)(3), and making false statements to federal agents, 18 U.S.C. 1001. The down payments were taxable upon receipt, not, as VanDemark argued, when customers purchased the cars after leasing them. With respect to his missing 2013 personal return, the court stated that a defendant is guilty even if he helps prepare, without presenting, the fraudulent return. View "United States v. VanDemark" on Justia Law

In 2003, the Alabama Legislature and the citizens of Greene County voted to allow nonprofit organizations in that county to operate bingo games for fundraising purposes. Greenetrack, Inc. ("Greenetrack"), which was not a nonprofit organization, almost immediately began offering live and electronic bingo games at its gambling facility. From 2004 to 2008, Greenetrack reaped vast profits under the guise that its whole casino-style bingo operation was constantly being leased and operated by a revolving slate of local nonprofit organizations, whose nominal role earned them a tiny fraction of the bingo proceeds. Eventually, the Alabama Department of Revenue ("the Department") audited Greenetrack, found that its bingo activities were illegal, and concluded that it owed over $76 million in unpaid taxes and interest. Following a decade of litigation, the Alabama Tax Tribunal voided the assessed taxes on the threshold ground that Greenetrack's bingo business (regardless of its legality) was tax-immune under a statute governing Greenetrack's status as a licensed operator of dog races. The Department appealed, and the Alabama Supreme Court reversed, rejecting the statutory analysis offered by the Tax Tribunal and circuit court. Judgment was rendered in favor of the Department. View "Alabama Department of Revenue v. Greenetrack, Inc." on Justia Law

In 2017, Appellant Shoshone County assessed properties owned by Respondents S&W OPS, LLC; POWDER, LLC; H2O, LLC; GOLF, LLC; APARTMENT, LLC; F&B, LLC; and VILLAGE MANAGEMENT, LLC (collectively “Taxpayers”). Taxpayers disputed the valuation and sought review by the Board of Equalization, and subsequently the Board of Tax Appeals (“BTA”). The BTA reduced the assessed value, and the County appealed to the district court. After a four-day bench trial, the district court upheld the BTA decision, determining that the County’s appraisal evidence was more credible than Taxpayers’ evidence; however, the district court ultimately held the County had not satisfied its burden of showing how the BTA decision was erroneous by a preponderance of the evidence. The County appealed to the Idaho Supreme Court, arguing that the district court applied the wrong standard of review by requiring the County to prove “how or why” the BTA decision was erroneous instead of simply concluding that the market value of the property was different than what was found by the BTA. After review, the Supreme Court agreed with the County’s position. The district court’s decision was reversed, the judgment was vacated, and the case was remanded with instructions for the district court to consider whether the BTA’s decision on valuation was erroneous given the evidence submitted during the de novo trial. If that decision on valuation was erroneous, the district court, as the fact-finder, had to set the valuation. View "Shoshone County v. S&W OPS, LLC" on Justia Law