Justia Government & Administrative Law Opinion Summaries

The Town of Sheldon appealed a hearing officer’s valuation of the subject property, a hydroelectric generating facility, as of April 1, 2019. It challenged the hearing officer’s application of the Income Approach to determine the property’s fair market value and his rejection of the Town’s Direct Sale Comparison approach. The Town essentially argued that the hearing officer’s findings were insufficient to support his conclusions. Finding no reversible error, the Vermont Supreme Court affirmed the valuation. View "Missisquoi Assoc. Hydro c/o Enel Green Power v. Town of Sheldon" on Justia Law

IRS Notice 2007-83, entitled “Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits” designates certain employee-benefit plans featuring cash-value life insurance policies as listed “tax avoidance" transactions. A cash-value life insurance policy combines life insurance coverage with a cash-value investment account. The IRS believes these transactions run the risk of allowing small business owners to receive cash and other property from the business “on a tax-favored basis.” The regulation requires reporting of transactions involving cash-value life insurance policies connected to employee-benefit plans.Taxpayers claimed that the IRS skipped the notice-and-comment process before promulgating this legislative rule as required by the Administrative Procedure Act, 5 U.S.C. 551, 553–59, 701–06. The Sixth Circuit reversed the district court and found the regulation invalid. The Notice was a “legislative rule,” with the “force and effect of law,” not a policy statement or interpretation. Congress did not expressly exempt the IRS from the APA’s requirements. View "Mann Construction, Inc. v. United States" on Justia Law

Christopher and Debra James appealed a district court order granting summary judgment in favor of the Idaho State Tax Commission (“Tax Commission”), reversing the decision of the Board of Tax Appeals (“BTA”). The district court affirmed the Tax Commission’s notice of deficiency decision, which disallowed a net operating loss carryback because the Jameses missed the deadline to claim the loss. Finding no reversible error, the Idaho Supreme Court affirmed the district court’s decision: Idaho Code sections 63-3072(e) and 63-3022(c)(2) required the Jameses to file their amended 2012 Idaho tax return by December 31, 2015, to carryback their 2014 NOL to the 2012 tax year. The Jameses failed to do so. View "Idaho State Tax Commission v. James" on Justia Law

The Supreme Court reversed in part the judgment of the Board of Tax Appeals (BTA) abating a tax penalty imposed against Appellee by the Tax Commissioner of Ohio, holding that the BTA's abatement of the penalty was clearly erroneous.The tax commissioner assessed unpaid tax in the amount of $4,821 as against Appellee and exercised his statutory discretion to impose a fifteen percent penalty amounting to $723. The BTA upheld the tax assessment against Appellee but found that the tax commissioner had abused his discretion in assessing a penalty. The Supreme Court reversed in part, holding that the BTA's holding that the tax commissioner abused his discretion and that the BTA's order abating the penalty were clearly erroneous. View "Karr v. McClain" on Justia Law

The Supreme Court affirmed the judgment of the circuit court holding that the Virginia Department of Taxation's corporation income tax assessments for the years in issue were erroneous and ordering the Department to refund Lorillard Tobacco Company the amount of its overpayments on the assessments for the years in issue, holding that there was no error.Lorillard filed an application for correction of erroneous assessment of corporation income taxes challenging the denial of its refund claims for certain assessments. The circuit court held that the Department's assessments were erroneous and ordered the Department to correct the assessments by refunding Lorillard the amount of its overpayments. The Supreme Court affirmed, holding that the circuit court did not err. View "Virginia Department of Taxation v. R.J. Reynolds Tobacco" on Justia Law

The Supreme Court affirmed the decision of the tax court concluding that three clinics - Perham Clinic, Ottertail Clinic, and New York Mills Clinic - were not subject to property tax because they clinics were exempt under Minn. Stat. 447.31, subd. 6, holding that there was no error.The exemption at issue is provided for hospital districts. At issue on appeal was whether to classify the three medical clinics that were owned and operated by Perham Hospital District as taxable or exempt. Otter Tail County classified the clinics as commercial and thus subject to property tax, concluding that the tax exemption at issue was available to hospitals and not to clinics. After a trial, the tax court concluded that the clinics were exempt from tax under Minn. Stat. 447.31, subd. 6. The Supreme Court affirmed, holding that the tax court did not clearly err in finding that the District used the clinics to improve and run Perham Hospital during the tax years at issue. View "Perham Hospital District v. County of Otter Tail" on Justia Law

Petitioner City of Berlin (City) appealed a New Hampshire Board of Tax and Land Appeals (BTLA) order determining that the City over-assessed respondent Public Service Company of New Hampshire d/b/a Eversource Energy (PSNH), for tax year 2017. The City challenged the BTLA’s decision to apply the New Hampshire Department of Revenue Administration (DRA) 2017 median equalization ratio to determine the proportionality of the City’s assessment of PSNH’s J. Brodie Smith hydroelectric facility (Smith Hydro). It argued the 2016 median equalization ratio — the most recent DRA ratio available at the time the City prepared the 2017 tax assessment — should have applied. Because the New Hampshire Supreme Court agreed, it reversed and remanded. View "Appeal of City of Berlin" on Justia Law

The Browns, U.S. citizens, lived in Australia while Mr. Brown worked for Raytheon. The IRS received the Browns' amended returns for 2015 and 2017, claiming the Foreign Earned Income Exclusion, signed by attorney Castro, but not accompanied by powers of attorney. The Browns' second amended return for 2015, again signed by Castro, also did not append any powers of attorney. The IRS disallowed the refund claims, indicating that "as an employee of Raytheon . . . [Brown] may have entered into a closing agreement . . . irrevocably waiving” Browns’ rights to claim the Exclusion under section 911(a).The Browns filed a refund suit under 26 U.S.C. 6532 and 7422(a). The government argued that the Browns had not “duly filed” their administrative refund claims in accordance with section 7422(a) because they had not personally signed and verified their amended returns or properly authorized an agent to execute them. The Browns responded that the IRS had waived those requirements by processing their claims despite the defects and that the requirements were waivable regulatory conditions. The Claims Court dismissed the suit for lack of subject matter jurisdiction. The Federal Circuit affirmed. The Claims Court had jurisdiction; the “duly filed” requirement is more akin to a claims-processing rule than a jurisdictional requirement. However, the Browns did not meet that requirement, which derives from statute and cannot be waived by the IRS, nor did the IRS waive the requirement. View "Brown v. United Statesx" on Justia Law

The issue on appeal in this case was whether taxpayer, Ooma, Inc., a California company, had sufficient contacts or nexus with Oregon to make it subject to local tax. The Oregon Tax Court concluded that Ooma’s contacts and nexus with Oregon were sufficient to satisfy the Due Process and Commerce Clauses, and granted summary judgment to the Department of Revenue. Finding no reversible error in that judgment, the Oregon Supreme Court affirmed the Tax Court. View "Ooma, Inc. v. Dept. of Rev." on Justia Law

General Motors was a Delaware corporation engaged in the sale of motor vehicles in Pennsylvania, and subject to Pennsylvania’s corporate income tax. GM contested the calculation of its 2001 Tax Year corporate income tax, after filing a report of change in its federal taxable income in March 2010. In February 2012, GM timely filed a petition for refund with the Department of Revenue’s (“Department”) Board of Appeals. It claimed that the cap on the net loss carryover (NLC) resulted in a “progressive effective tax rate” which violated the Uniformity Clause of the Pennsylvania Constitution. It explained that “a taxpayer conducting business on a larger scale in Pennsylvania pays a higher effective tax rate than a similarly situated taxpayer conducting business on a smaller scale.” In Nextel Communications of the Mid-Atlantic, Inc. v. Commonwealth, Department of Revenue, 171 A.3d 682 (Pa. 2017), the Pennsylvania Supreme Court held that the NLC deduction applicable to corporate income tax for the tax year ending December 31, 2007 (“2007 Tax Year”), violated the Uniformity Clause. Here, the Court applied Nextel and considered GM's constitutional challenges to the NLC provisions applicable to corporate income tax in the tax year ending December 31, 2001 (“2001 Tax Year”). The Supreme Court agreed with the Commonwealth Court that Nextel applied retroactively to this case, however, it reversed the Commonwealth Court to the extent it remedied the violation of the Uniformity Clause by severing the $2 million NLC deduction cap, which would have resulted in an unlimited NLC deduction. Instead, the Supreme Court severed the NLC deduction provision in its entirety, resulting in no NLC deduction for the 2001 Tax Year. The Supreme Court affirmed the Commonwealth Court’s order to the extent it directed the Department to recalculate GM’s corporate income tax without capping the NLC deduction and issue a refund for the 2001 Tax Year, which the Court concluded was required to remedy the due process violation of GM’s rights pursuant to McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Department of Business Regulation of Florida, 496 U.S. 18 (1990). View "General Motors Corp. v. Pennsylvania" on Justia Law