Justia Tax Law Opinion Summaries

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

Petitioner appealed the denial of an income tax deduction he claimed for a charitable donation of an aircraft. Because Petitioner failed to comply with the statutory requirements for such a deduction, the Fifth Circuit affirmed the judgment of the Tax Court.   The court explained Section 170 of the Internal Revenue Code governs deductions for charitable contributions. For a contribution of a qualified vehicle, including airplanes, whose value exceeds $500, the taxpayer must provide contemporaneous written acknowledgment from the donee organization of the contribution, including the name and taxpayer identification number of the donor. Further, the donee organization must provide the IRS with the information contained in the acknowledgment.   Here, the court wrote that the Commissioner of Internal Revenue (“Commissioner”) was entitled to summary judgment as Petitioner was disallowed from claiming the deduction as a matter of law. Petitioner failed to provide a contemporaneous written acknowledgment from the donee organization that satisfied the requirements of 26 U.S.C. Section 170(f)(12)(B). Petitioner did not provide a satisfactory contemporaneous written acknowledgment with his Form 1040X. He included a letter dated December 30, 2010, from the Society discussing the donation of the airplane, but the letter was not addressed to Petitioner. The letter does not mention Petitioner and does not provide his taxpayer identification number. Thus, the court held that the letter cannot substantiate the contribution of the airplane under Section 170(f)(12)(B)(i). View "Izen v. CIR" on Justia Law

In 2016, Nucor Steel Louisiana, LLC submitted a tax refund claim to St. James Parish School Board and the St. James Parish Tax Agency (collectively the “Collector”). The claim alleged an overpayment of sales and use tax paid pursuant to a full contract price that was rebated. In 2018, the Collector issued a written denial of Nucor’s refund claim. Following the redetermination hearing, the Collector sent Nucor another letter denying the refund claim. Then, on May 24, 2018, just over two years after the Collector received the refund claim, Nucor appealed the denial to the Board of Tax Appeal (“BTA”). The Collector responded by filing peremptory exceptions of prescription, peremption, and res judicata, asserting that Nucor failed to timely appeal under La. R.S. 47:337.81(A)(2). The BTA granted the Collector’s exceptions, finding Paragraph (A)(2) provides “two alternative prescriptive periods for a taxpayer to appeal refund denial.” Because the Collector failed to render a decision within one year of Nucor’s refund claim being filed, Nucor had 180 days, or until July 26, 2017, to appeal. Thus, the BTA found Nucor’s May 24, 2018 appeal untimely. Nucor appealed. The court of appeal reversed, finding that Nucor’s appeal within 90 days of that decision was timely. The court of appeal also found the Collector’s statement to Nucor that it had “ninety (90) calendar days” to appeal amounted to a representation that Nucor relied upon to its detriment. Using the standard set forth in Suire v. Lafayette City-Parish Consolidated Government, 04-1459 (La. 4/12/05), 907 So.2d 37, which only required a reasonable reliance on a representation, the court found the Collector estopped from arguing prescription. The Louisiana Supreme Court granted the Collector’s writ application to determine the proper interpretation of the appeal periods in La. R.S. 47:337.81 and to determine the proper standard for evaluating the estoppel and detrimental reliance claims. The Supreme Court reversed the court of appeal and reinstated the trial court’s ruling on the exceptions. View "Nucor Steel Lousiana, LLC v. St. James Parish School Board et al." on Justia Law

The Supreme Judicial Court vacated in part the summary judgment granted in favor of the Maine Tax Assessor entered in the business and consumer docket ruling that TracFone Wireless, Inc.'s Lifeline service was subject to the State of Maine's prepaid wireless fee and service provider tax, holding that summary judgment was improper as to the prepaid wireless fee.On appeal, TracFone also challenged the trial court's denial of its motion to compel the production of documents related to taxpayers similarly situated to TracFone. The Supreme Judicial Court (1) vacated the summary judgment as to the prepaid wireless fee, holding that the lower court erred in concluding that the Lifeline service was "paid for in advance"; (2) affirmed the summary judgment as to the service provider tax because TracFone sold its Lifeline service under Me. Rev. Stat. 36, 2552; and (3) affirmed the order denying TracFone's motion to compel the production of documents. View "State Tax Assessor v. Tracfone Wireless, Inc." on Justia Law

In the November 2020 election, Colorado voters approved Proposition 118, which established the Paid Family and Medical Leave Insurance Act (“the Act”). This case concerned whether the Division of Family and Medical Leave Insurance's (“the Division”) collection of premiums under the Act violated section (8)(a) of the Taxpayer’s Bill of Rights (“TABOR”), specifically, whether the premium was an unconstitutional “added tax or surcharge” on income that was not “taxed at one rate.” And, if so, the Colorado Supreme Court was asked whether the Act’s funding mechanism was severable from the rest of the Act. The Supreme Court concluded the premium collected by the Division did not implicate section (8)(a) because the relevant provision of that section concerned changes to “income tax law.” The Act, a family and medical leave law, was not an income tax law or a change to such a law. Moreover, the premium collected pursuant to the Act was a fee used to fund specific services, rather than a tax or comparable surcharge collected to defray general government expenses. View "Chronos Builders v. Dept. of Labor" on Justia Law

The Supreme Court held that the Comptroller of Public Accounts of the State of Texas properly taxed an insurer based on premiums it received from sales of "stop-loss" policies under Texas Insurance Code Chapters 222 and 257, holding that the Comptroller properly assessed the taxes at issue.Blue Cross Blue Shield sought a refund of its 2012 premium and maintenance taxes collected from its stop-loss policies, arguing that the policies did not cover risks on "individuals or groups" under Chapter 222. The trial court agreed and ruled for Blue Cross. The court of appeals affirmed. The Supreme Court reversed, holding (1) the premiums Blue Cross collected on its stop-loss policies were subject to taxation under Chapter 222; and (2) because Blue Cross collected these premiums under its authority to write health insurance, they were subject to Chapter 257's maintenance tax. View "Hegar v. Health Care Service Corp." on Justia Law