Justia Tax Law Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the district court upholding the ruling of the Property Assessment Appeal Board (PAAB) concluding that bins that primarily hold raw material until it is needed in the manufacturing process do not themselves constitute "machinery," holding that some, but not all, of the ingredient bins qualify for a tax exemption.At issue was when bins for holding ingredients qualify for a tax exemption as machinery used in manufacturing establishments under Iowa Code 427A.1(1)(e). The court of appeals disagreed with the PAAB's interpretation of the statute, finding that bins that are integrated into the manufacturing process and used for temporary storage of ingredients fell within the statutory exemption. The Supreme Court vacated the court of appeals' decision and reversed in part the district court's judgment, holding (1) customized overhead bins within a building where feed is manufactured constitute part of a continuous piece of machinery within that building; and (2) two large stand-alone corn silos, while connected by an underground conveyor to the feed manufacturing facility, do not meet the definition of machinery. View "Stateline Cooperative v. Iowa Property Assessment Appeal Board" on Justia Law

28 U.S.C. 1346(a)(1) does not confer jurisdiction, concurrent with the United States Court of Federal Claims, over a taxpayer's civil action against the government solely for overpayment interest owed to the taxpayer.The Eleventh Circuit affirmed the district court's order dismissing plaintiffs' amended complaint for lack of subject matter jurisdiction over their standalone claim for overpayment interest allegedly owed to them by the government. Plaintiffs are victims of Bernie Madoff's Ponzi scheme and seek to recoup their losses. They filed multiple claims with the IRS, subsequently received tentative refunds of approximately ten million dollars, and now seek interest on the tax overpayments for the tax years at issue. The Court of Federal Claims denied the government's motion to dismiss as moot after finding that it lacked jurisdiction over plaintiffs' claim because it was untimely under the Tucker Act. The Court of Federal Claims, however, transferred the case to the Southern District of Florida because it was not evident how the Southern District of Florida or this Court would address jurisdiction over a standalone claim for overpayment interest.Read in context of the entire statute, the court concluded that the "any sum" category of section 1346(a)(1) does not encompass standalone overpayment interest claims against the government and that under the Tucker Act, the Court of Federal Claims has exclusive jurisdiction over such standalone claims exceeding $10,000. Therefore, the district court correctly determined that it lacked jurisdiction over plaintiffs' overpayment interest claim and properly dismissed their amended complaint. View "Paresky v. United States" on Justia Law

The Supreme Judicial Court affirmed the judgment entered in the business and consumer docket affirming the State Tax Assessor's denial of Appellant's request for an income tax refund for the 2013 taxable year, holding that the superior court did not err.Somerset Telephone Company and affiliated corporations (collectively, Appellant) filed a 2013 Maine tax return showing positive Maine taxable income and state income tax liability. Appellant later filed an amended 2013 return listing an adjusted federal taxable income resulting in a decreased Maine taxable income and decreased tax liability. To account for the difference, Somerset unsuccessfully requested from the Assessor a partial refund. In this ensuing litigation, the business and consumer docket entered a final judgment in the Assessor's favor. The Supreme Judicial Court affirmed, holding that the superior court correctly affirmed the decision of the State Tax Assessor. View "Somerset Telephone Co. v. State Tax Assessor" on Justia Law

The Eleventh Circuit affirmed the Tax Court's decision upholding the Commissioner's determination that petitioner owes an income tax deficiency for 2011. The court concluded that the Tax Court did not clearly err in finding that petitioner failed to substantiate his claimed net operating loss (NOL) deduction in 2011. The court also concluded that the Tax Court did not abuse its discretion by overruling petitioner's objections to the Commissioner's deficiency computations under Rule 155, which included the income, but not the deductions, from petitioner's late-filed 2011 tax return. Finally, the court could not say that the Tax Court abused its discretion in refusing to reopen the case to litigate an issue that petitioner never attempted to raise. View "Barker v. Commissioner of Internal Revenue" on Justia Law

The Government filed suit to enforce the IRS assessment of a penalty against defendant for failing for the year 2007 to file a Report of Foreign Bank and Financial Accounts (FBAR) pursuant to 31 U.S.C. 5321. The district court granted summary judgment in favor of the Government and enforced the IRS assessment of a penalty for a willful violation.The Eleventh Circuit agreed with the district court that there are no genuine issues of material fact regarding defendant's willfulness or recklessness where the evidence was overwhelming that defendant sought to hide his overseas accounts from the United States government. The court joined its sister circuits and held that the maximum penalty is established by the 2004 amendment to 31 U.S.C. 5321, not by the regulation in 31 C.F.R. 1010.820(g)(2). The court also concluded that defendant's several arguments that the IRS factfinding proceedings were so insufficient as to warrant de novo review—in departure from the usual arbitrary and capricious review—are wholly without merit; the IRS's actions were not arbitrary and capricious; and defendant's arguments regarding the imposition of interest and late fees are without merit. Accordingly, the court affirmed the judgment. View "United States v. Rum" on Justia Law

Plaintiff, one of the largest marijuana dispensaries in the United States, appealed the Tax Court's decision on a petition for redetermination of federal income tax deficiencies. At issue is whether a cannabis dispensary that purchases the marijuana it resells and that values its inventory using the cost method must account for its inventory cost in accordance with section 1.471-3(b) of the Treasury Regulations.The Ninth Circuit affirmed the Tax Court's decision, declining to consider plaintiff's constitutional claim that that I.R.C. 280E violates the Sixteenth Amendment because plaintiff failed to raise the claim in the Tax Court. The panel rejected plaintiff's contention that some of its expenditures, even if they cannot be deducted under section 280E, can be excluded from income as part of its inventory cost under general inventory tax accounting rules. Rather, the panel concluded that the Tax Court did not err in concluding that plaintiff's inventory cost is determined by Treas. Reg. 1.471-3(b), which applies to a purchaser and reseller of the products it sells. Finally, the panel declined to consider plaintiff's contention, which was not raised before the Tax Court, that the Tax Court should have allowed at least some of plaintiff's claimed exclusions as "necessary charges incurred in acquiring possession of the goods" under Treas. Reg. 1.471-3(b). View "Patients Mutual Assistance Collective Corp. v. Commissioner" on Justia Law

Pro se petitioner-appellant John Minemyer appealed two orders from the United States Tax Court. The first order granted the Commissioner of Internal Revenue’s (“Commissioner’s”) Motion for Partial Summary Judgment and denied Minemyer’s Motion for Summary Judgment. The second order denied Minemyer’s Motion for Reconsideration. Neither order, however, was a final decision by the Tax Court. Further, Minemyer’s appeal of those orders did not ripen after the Tax Court issued an opinion, without a “decision,” addressing the only remaining claim. Accordingly, the Tenth Circuit dismissed Minemyer’s appeal for lack of appellate jurisdiction. View "Minemyer v. CIR" on Justia Law

At Tax Court, the parties disagreed about what types of equipment fall within the definition of "logging equipment" exempt from ad valorem property taxation under ORS 307.27. Specifically, they disagreed about what types of equipment used for logging road work - logging road construction, maintenance, reconstruction, improvement, closure, or obliteration - fell within the definition. Plaintiff Bert Brundige, LLC argued that all types of equipment used for logging road work fell within the definition. Defendant, the Oregon Department of Revenue, argued that excavators were the only type of equipment used for logging road work that fell within the definition. The Tax Court agreed with defendant and entered a judgment in its favor. Plaintiff appealed. Finding no reversible error, the Oregon Supreme Court affirmed. View "Bert Brundige, LLC v. Dept. of Rev." on Justia Law

The Supreme Court affirmed an order of the circuit court finding in favor of Welspun Tubular, LLC in this challenge to a disallowed compensating-use-tax exemption, holding that the circuit court did not err.A "sales and use" tax audit of Welspun's books and records for the reporting periods May 1, 2009 through April 30, 2012 resulted in an assessment of compensating-use tax totaling $162,266 on Welspun's purchases of steel grit during the audit period. Welspun brought this suit, arguing that its grit purchases were tax exempt as the purchase of manufacturing equipment. The circuit court found for Welspun, concluding that the Arkansas Department of Finance and Administration erred in assessing tax on Welspun's purchases of grit. The Supreme Court affirmed, holding that the circuit court did not clearly err in finding that the grit was used to manufacture an article of commerce. View "Walther v. Welspun Tubular, LLC" on Justia Law

The Supreme Court reversed in part the decision of the Board of Tax Appeals (BTA) that upheld three use-tax assessments based on Appellant's purchase of three trucks, holding that the BTA erred by failing to correlate its findings with the distinct primary uses of the trucks.The trucks at issue were two Peterbilt trucks and one Lodal truck. Appellant argued that because it purchased the three trucks for use in its business as a for-hire motor carrier, the purchase were exempt from sales and use tax under Ohio Rev. Code 5739.02(B)(32)'s "highway transportation for hire" exemption. The tax commissioner and the BTA determined that the exemption did not apply to the purchases because Appellant's use of the trucks to transport waste material to landfills did not qualify as the transportation of "personal property belonging to others." The Supreme Court reversed in part, holding (1) for purposes of section 5739.02(B)(32), waste is "personal property belonging to" the person or entity that generated it when the person or entity has an agreement with the hauler that specifies where the waste is to be taken for disposal; and (2) because the generators of the waste hauled by the Peterbilt trucks designated the destination of the waste, the Peterbilt trucks were entitled to the exemption. View "N.A.T. Transportation, Inc. v. McClain" on Justia Law