Justia Tax Law Opinion Summaries

The Supreme Court affirmed the decision of the circuit court granting judgment on the pleadings in favor of the Affton Fire Protection District, the governor, and the attorney general (collectively, Defendants) in this challenge to Mo. Rev. Stat. 72.418.2 and 321.322.3, holding that the circuit court did not err.The City of Crestwood and two of its resident taxpayers (collectively, Plaintiffs) argued that sections 72.418.2 and 321.322.3, which govern the provision of and payment for fire protection services in certain annexed areas, violate the prohibition against special laws in Mo. Const. art. III, 40 and that section 72.418.2 violates constitutional due process protections and provisions of the Missouri Constitution prohibiting certain taxes and the creation of unfunded mandates. The Supreme Court held (1) a rational basis supported the classification scheme in sections 72.418 and 321.322.3; (2) the fee Crestood pays to the district is not a tax on the resident taxpayers of Crestwood; and (3) section 72.418.2 does not create an unfunded mandate. View "City of Crestwood v. Affton Fire Protection District" on Justia Law

The Supreme Judicial Court vacated the judgment of the superior court affirming a 2019 decision of the State Board of Property Tax Review granting the tax abatement requests of Expera Old Town, LLC for the 2014 and 2015 tax years for a wood pulp and paper mill, holding that the superior court erred.Expera Old Town, LLC requested tax abatements for 2014 and 2015, but the City of Old Town denied the requests. In 2017, the Board affirmed the City's denial of the requested abatements. The superior court vacated the Board's decision and remanded the case. On remand, in 2019, the Board granted Expera Old Town's tax abatement requests for the same tax years. The Supreme Court vacated the superior court's judgment, holding that Expera Old Town failed to meet its initial burden of showing that the assessments were manifestly wrong. View "City of Old Town v. Expera Old Town, LLC" on Justia Law

The IRS began a criminal investigation of Gaetano, who owns Michigan cannabis dispensaries. Portal 42, a software company that provides the cannabis industry with point-of-sale systems, confirmed that Gaetano was a client. Agents served a summons, ordering Portal 42 to produce records “and other data relating to the tax liability or the collection of the tax liability or for the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws concerning [Gaetano] for the periods shown.” The IRS did not notify Gaetano about the summons. Portal 42 sent the IRS an email with a hyperlink to the requested records. An IRS computer specialist copied the documents. None of the personnel in the IRS’s Criminal Investigation Division have viewed the records.Gaetano filed a petition under 26 U.S.C. 7609, seeking to quash the summons, arguing that the IRS should have notified Gaetano about the summons and that it was issued in bad faith. The Sixth Circuit affirmed the dismissal of the action for lack of subject-matter jurisdiction because Gaetano lacked standing. Section 7609 waives the government’s sovereign immunity to allow taxpayers to bring an action to quash certain third-party IRS summonses. An exception applies because the summons here was issued by an IRS criminal investigator “in connection” with an IRS criminal investigation and the summoned party is not a third-party recordkeeper. Without a statutory waiver of sovereign immunity, subject-matter jurisdiction cannot obtain. View "Gaetano v. United States" on Justia Law

In these cases concerning property tax abatement requests the Supreme Judicial Court affirmed two decisions of the superior court vacating a decision denying requests for abatement and granting a petition for judicial review of an adverse decision concerning another request for a tax abatement, holding that the superior court did not err.This consolidated appeal concerned property tax abatement requests made by the Roque Island Gardner Homestead Corporation (RIGHC). The superior court vacated a decision of the Board of Appeals (BOA) of the Town of Jonesport denying RIGHC's requests for abatement concerning three tax years and remanded the matter for the BOA to make an independent determination of the property's fair market value. The court also granted judicial review as to the State Board of Property Tax Review's adverse decision concerning RIGHC's request for another tax year abatement and directed the Town to grant the abatement request. The Supreme Judicial Court affirmed both decisions, holding that the superior court did not err. View "Roque Island Gardner Homestead Corp. v. Town of Jonesport" on Justia Law

To finance the purchase of a home in 2008, Wood borrowed $39,739.44. About six years later, Wood defaulted, with an unpaid balance of $23,066.66. The Department of Housing and Urban Development (HUD), which had insured the loan, paid that amount and sent Wood a Notice of Intent to Collect by Treasury Offset, using income tax overpayments. In 2017, Treasury offset Wood's federal tax overpayment of $9,961 toward the debt. In 2018, Wood filed a Chapter 7 bankruptcy petition, opting to exempt any 2017 income tax overpayment. Treasury nonetheless offset a $6,086 overpayment.Wood requested that the bankruptcy court void HUD’s lien and order a return of the $6,086. The court concluded that a debtor’s tax overpayment becomes property of the estate, protected by the stay, and the debtor may exempt the overpayments and defeat a governmental creditor’s right to setoff. The district court agreed, stating that because Treasury had knowingly intercepted the overpayments after the Woods filed for bankruptcy, equity did not favor granting permission to seek relief from the automatic stay.The Fourth Circuit remanded. The protections typically accorded properly exempted property under 11 U.S.C. 522(c) do not prevail over the government’s 26 U.S.C. 6402(d) right to offset mutual debts. Although the government exercised that right before requesting relief from the automatic stay, there is no reason to abridge the government’s 11 U.S.C. 362(d) right to seek the stay’s annulment. View "Wood v. United States Department of Housing and Urban Development" on Justia Law

Humboldt County Ballot Measure S proposed a tax on commercial cultivators of marijuana and was approved by the voters. The tax became operative on January 1, 2017. Measure S allows the Board of Supervisors to amend the law or approve enforcement regulations promulgated by the administrative officer if the action “does not result in an increase in the amount of the tax or broaden the scope of the tax.” The Supervisors amended Measure S in June 2017, and again in April 2018, making the tax applicable to all persons with a cultivation permit, as opposed to just those engaged in cultivation; redefining “cultivation area”; and changing the time when the taxes start to accrue.Silva owns property in Humboldt County. No one cultivated cannabis on the property in 2017. The County sent her an invoice of $40,000 in commercial cannabis cultivation taxes under Measure S for the year 2017–2018. Silva paid the invoice. The County sent an invoice of $54,025 for the year 2018–2019. Silva again paid the invoice.A 2018 petition argued that the amendments impermissibly broadened Measure S. The court of appeal affirmed a ruling in Silva's favor. The trial court was not procedurally barred from considering the challenge to the Board’s amendments. The doctrine of exhaustion of administrative remedies does not apply and the amendments expanded, rather than just clarifying, Measure S. View "Silva v. Humboldt County" on Justia Law

The Supreme Court reversed the judgment of the circuit court dismissing Plaintiffs' three separate complaints against the County of Northampton (the County) and the Town of Cape Charles (the Town) with prejudice, holding that the circuit court abused its discretion in excluding one of Plaintiffs' witnesses as an expert.In their complaint, Plaintiffs alleged that their real property had been overvalued in recent tax assessments. The County and Town each filed a motion in limine and motion to dismiss arguing that Plaintiffs' two experts should be excluded because Plaintiffs had not complied with the court's uniform pretrial scheduling order. The court granted the motion to exclude both witnesses as experts and dismissed the case with prejudice. The Supreme Court reversed, holding that the trial court abused its discretion by excluding one of Plaintiffs' intended expert witnesses from testifying at trial. View "Galloway v. County of Northampton" on Justia Law

Jeffers underreported his 2008 income and was audited. The IRS assessed additional taxes and penalties. Jeffers filed his 2009 tax return late, reporting that he owed more than $12,000 in taxes without including any payment. The IRS assessed the unpaid amount plus interest and penalties. An installment agreement was terminated when he failed to make payments. In 2012, the IRS mailed Jeffers proper notice of the tax lien on his property with respect to unpaid debt from the 2008 and 2009 tax periods, 26 U.S.C. 6320(a), 6321, explaining the right to a Collection Due Process (CDP) hearing. Jeffers did not request one. He filed amended returns claiming he was owed refunds. In 2017, the IRS notified Jeffers of its intent to levy on his property. This time, Jeffers timely requested a CDP hearing.The officer found the liability issue precluded because Jeffers had a prior opportunity to raise the issue in 2012. The Office of Appeals issued a notice of determination sustaining the proposed levy action. The Tax Court granted the IRS summary judgment. The Seventh Circuit affirmed. Jeffers could not challenge his underlying tax liability because he received notice of the federal tax lien and had the opportunity to dispute his tax liability then. The settlement officer was not obligated to consider the amended tax returns because there is no right to have one’s amended return considered. View "Jeffers v. Commissioner of Internal Revenue" on Justia Law

Plaintiffs Johnathan Billewicz, Michael Billewicz, J & M Investment Trust, and Lillian Billewicz appealed a the trial court’s grant of summary judgment to defendant Town of Fair Haven. Plaintiffs sought damages and a declaratory judgment that deeds purporting to convey their properties to the Town following a tax sale were void. The court found their action was foreclosed by the one-year statute of limitations at 32 V.S.A. 5294(4) for claims challenging the validity of a tax collector’s acts. Plaintiffs argued this was error because their claims were instead subject to the three-year statute of limitations for actions for the recovery of land sold at a tax sale under 32 V.S.A. 5263. Finding no reversible error, the Vermont Supreme Court affirmed. View "Billewicz, et al. v. Town of Fair Haven" on Justia Law

The Ninth Circuit reversed the district court's judgment in an action brought by the United States against taxpayer for tax penalties and interest involving her failure to report foreign financial accounts. In this case, taxpayer did not timely file a Report of Foreign Bank and Financial Accounts form (FBAR) disclosing her foreign financial accounts in the United Kingdom. The IRS found that taxpayer violated the reporting requirements of 31 U.S.C. 5314 and imposed multiple penalties under 31 U.S.C. 5321(a)(5)(A) based on her belated submission of a single FBAR.The panel held that section 5321 authorizes the IRS to impose only one non-willful penalty when an untimely, but accurate, FBAR is filed, no matter the number of accounts. In this case, taxpayer was required to file one FBAR for the 2010 calendar year by June 30, 2011 and failed to do so; she committed one violation and the IRS concluded that her violation was non-willful; and thus the maximum penalty for such a violation "shall not exceed $10,000." View "United States v. Boyd" on Justia Law