Justia Tax Law Opinion Summaries

The Fifth Circuit affirmed the district court's grant of the IRS's motion to dismiss an action brought by plaintiff, seeking to recover penalties that he paid for filing late tax returns and making late tax payments for the 2012-2015 tax years. Plaintiff alleged that he was entitled to the "reasonable cause" exception to the otherwise mandatory penalties.The court concluded that plaintiff failed to sufficiently plead reasonable cause under I.R.C. 6651(a)(1)–(2) for exemption from the mandatory penalties where plaintiff could have used ordinary business care and prudence to assure that his taxes were filed and paid, much like he conducted business and employed a CPA while incarcerated. Likewise, the court concluded that plaintiff failed to demonstrate reasonable cause under I.R.C. 6654 for the same reasons. View "Lindsay v. United States" on Justia Law

Plaintiffs-Appellants Walter “Gil” Goodrich (individually and in his capacity as the executor of his father—Henry Goodrich, Sr.’s— succession), Henry Goodrich, Jr., and Laura Goodrich Watts brought suit against Defendant-Appellee United States of America. Plaintiffs claimed that, in an effort to discharge Henry Sr.’s tax liability, the Internal Revenue Service (“IRS”) wrongfully levied their property, which they had inherited from their deceased mother, Tonia Goodrich, subject to Henry Sr.’s usufruct. A magistrate judge previously determined Plaintiffs were not the owners of money seized by the IRS, and that represented the value of certain liquidated securities. The Fifth Circuit determined that whether Plaintiffs were in fact owners of the disputed funds was an issue governed by Louisiana law. The Fifth Circuit declined further review until the Louisiana Supreme Court had a chance to review the ownership issue in the first instance. View "Goodrich, et al v. United States" on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court affirming a decision of the State Board of Property Tax Review upholding the Town of Madison's denial of Madison Paper Industries' (MPI) request for a property tax abatement for the 2016-17 tax year, holding that the Board made no errors of law, and its findings were supported by competent evidence in the record.The Board found MPI's appraisal and its underlying factual assertions were not credible and that MPI had failed to meet its burden of persuasion. On appeal, MPI argued that the Board failed to apply the Maine Constitution's required that it apply the "just value" standard to valuing the property. The Supreme Judicial Court affirmed, holding that the Board's determinations were not erroneous and that its findings were supported by the evidence. View "Madison Paper Industries v. Town of Madison" on Justia Law

Taxpayer Level 3 Communications, LLC (Level 3) challenged the Oregon Tax Court’s determination of the real market value of its tangible and intangible property for the 2014-15, 2015-16, and 2016-17 tax years. Level 3 argued that the Tax Court held that the central assessment statutory scheme permitted taxation of the entire enterprise value of the company, contrary to the wording of applicable statutes that permit taxation only of a centrally assessed corporation’s property. According to Level 3, the Tax Court applied that erroneous holding to incorrectly accept the Department of Revenue’s (the department’s) valuations of Level 3’s property for the relevant tax years. The Oregon Supreme Court concluded Level 3 misconstrued the Tax Court’s decision, and the Tax Court did not err by accepting the department’s valuations. Accordingly, the Tax Court’s judgment was affirmed. View "Level 3 Communications, LLC v. Dept. of Rev." on Justia Law

Greenville County Council implemented what it called a "road maintenance fee" to raise funds for road maintenance and a "telecommunications fee" to upgrade public safety telecommunication services. Plaintiffs, three members of the South Carolina General Assembly, claimed the two charges were taxes and, therefore, violated section 6-1-310 of the South Carolina Code (2004). The South Carolina Supreme Court agreed: the road maintenance and telecommunications taxes were invalid under South Carolina law. View "Burns v. Greenville County Council" on Justia Law

In this appeal requiring the Supreme Court to determine the priority of tax liens levied on real property by the Georgetown Special Taxing District the Supreme Court reversed the judgment of the trial court subordinating liens acquired by Defendant to the Georgetown Fire District, holding that the fire district's tax liens were subordinate to those of Defendant, which, in turn, were subordinate to those of the town.Plaintiffs - the town of Redding, the Redding Water Pollution Control Commission, and Georgetown Fire District - brought this action to foreclose municipal liens against Defendant RJ Tax Lien Investments, LLC, who had been assigned real estate tax liens originally levied by the taxing district. The trial court granted the motions for partial summary judgment with respect to priority filed by the town and the fire district and rendered a judgment of strict foreclosure in favor of the town and the fire district. The Supreme Court reversed in part, holding that the trial court incorrectly concluded that Defendant's liens were subordinate to those of the fire district. View "Redding v. Georgetown Land Development Co., LLC" on Justia Law

The Supreme Court affirmed the judgment of the district court holding that the "resort service fee" that Boyne USA, Inc. charges guests is not subject to Montana's lodging facilities use tax and forfeited guests deposits collected by Boyne are not subject to either the state use tax or sales tax, holding that the district court did not err.Specifically, the Supreme Court held that the district court (1) did not err in holding that Boyne's resort services fee was not subject to the lodging facilities use tax; (2) did not err in holding that the resort services fee was subject to the sales tax; and (3) did not err by holding that forfeited guest deposits are not subject to the lodging facilities use tax or the sales tax. View "Boyne USA, Inc. v. Department of Revenue" on Justia Law

Gasoline is subject to an excise tax. The combined fuel excise taxes account for more than 80% of the annual revenue collected for the Highway Trust Fund. The 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act. introduced new credits that fuel producers could use to offset their fuel excise taxes, including one for using “alternative fuels” to create “alternative fuel mixtures” (AFM credit), 26 U.S.C. 6426(e).U.S. Venture buys fuel from various suppliers and combines it with different additives before selling the finished product to retailers. Since 2012 U.S. Venture has commonly added butane to the gasoline it produces and sells. Butane is a type of gas, made from both natural gas and petroleum. It has long been considered a fuel additive, with suppliers adding it to gasoline since at least the 1960s.In 2017. U.S. Venture first sought an AFM tax credit for producing and selling fuel that contained a mixture of gasoline and butane. The IRS rejected its position. The district court and Seventh Circuit affirmed. There is nothing alternative about gasoline containing a butane additive, as indicated by a combination of statutory provisions defining the scope of the alternative fuel mixture tax credit. View "U.S. Venture, Inc. v. United States" on Justia Law

This appeal relates to TOT Holdings' execution of a deed that donated to Foothills Land Conservancy, a conservation easement encumbering nearly all its property. The IRS disallowed the deduction claimed by the taxpayer, and the Tax Court upheld that decision because the deed conveying the easement contained a formula for the distribution of proceeds that did not comply with the extinguishment proceeds requirement and the deed was not saved by purported interpretive provisions. The taxpayer appealed.The Eleventh Circuit concluded that the Tax Court correctly determined that the taxpayer did not comply with the extinguishment proceeds requirement and that the deed was not saved by the disputed provisions because they constitute an unenforceable condition-subsequent savings clause. The court also held that the Tax Court did not commit reversible error in approving the penalties assessed. Accordingly, the court affirmed the judgment. View "TOT Property Holdings, LLC v. Commissioner of Internal Revenue" on Justia Law

A mining company appealed the borough assessor’s valuation of its mine to the borough board of equalization. At a hearing the company presented a detailed report arguing the borough had improperly included the value of “capitalized waste stripping”when calculating the tax-assessed value of the mine. The assessor maintained its position that waste stripping was taxable, but reduced its valuation of the mine to better reflect the remaining life of the mine. The board approved the assessor’s reduced valuation of the mine and the superior court affirmed the board’s decision. The mine owners argued that waste stripping fell within a statutory exemption from taxation. The Alaska Supreme Court construed municipal taxing power broadly, and read exceptions to that power narrowly. The Court found waste stripping was not a “natural resource,” but an improvement that made it easier for miners to access natural resources. The Court concluded that the value of this improvement, like that of other improvements at the mine site, was subject to tax by the borough. The Court therefore affirmed the superior court’s decision affirming the board’s valuation. View "Fairbanks Gold Mining, Inc. vs. Fairbanks North Star Borough Assessor" on Justia Law