Justia Civil Procedure Opinion Summaries

Johannes and Linda Lamprecht, Swiss citizens who lived in the United States in 2006 and 2007, underreported their taxable income by falsely claiming they had no foreign bank accounts. In reality, they had millions in a Swiss bank, UBS. The couple amended their tax returns for 2006 and 2007 in 2010, after the United States served a John Doe Summons on UBS in 2008, seeking information about unknown taxpayers who might have failed to report taxable income in UBS accounts. The amended returns reported taxable income in the previously undisclosed UBS accounts, increasing their tax liability by approximately $2.5 million. The couple paid these back taxes, but in 2014, the IRS informed them they would be penalized for their original inaccuracies, and in 2015, issued a formal “notice of deficiency” assessing about $500,000 in penalties.The Lamprechts challenged these penalties in the United States Tax Court, arguing that the IRS didn’t follow the tax code’s procedures when it first decided to penalize them, that they deserved protections for voluntarily fixing their own mistake before the IRS acted, and that the statute of limitations for assessing accuracy penalties had run on the two tax years. The tax court granted summary judgment to the IRS.The United States Court of Appeals for the District of Columbia Circuit affirmed the tax court's decision. The court found that the IRS had complied with the statutory requirement for a supervisor's written approval for the penalty assessment. The court also ruled that the Lamprechts' corrected returns did not protect them from penalties because they were filed after a John Doe Summons was issued. Lastly, the court held that the statute of limitations did not bar the assessment of penalties because the John Doe Summons extended the statute-of-limitations period. View "Lamprecht v. Cmsnr. IRS" on Justia Law

The case involves the United States government's action to reduce federal tax liens to judgment and foreclose on real property. The government sought to foreclose on tax liens against a property owned by Komron Allahyari. Shaun Allahyari, Komron's father, was named as an additional defendant due to his interest in the property through two deeds of trust. The district court found that the government was entitled to foreclose on the tax liens and sell the property. However, the court did not have sufficient information to enter an order for judicial sale and ordered the parties to submit a Joint Status Report. Shaun Allahyari filed an appeal before the parties submitted the Joint Status Report and stipulated to the value of the property to be sold.The United States Court of Appeals for the Ninth Circuit dismissed the appeal for lack of jurisdiction. The court explained that the district court's order was not final because it did not have sufficient information to enter an order for judicial sale. The court also clarified that for a decree of sale in a foreclosure suit to be considered a final decree for purposes of an appeal, it must settle all of the rights of the parties and leave nothing to be done but to make the sale and pay out the proceeds. Because that standard was not met in this case, there still was no final judgment. The court therefore dismissed the appeal for lack of jurisdiction. View "USA V. ALLAHYARI" on Justia Law

The case involves Eduardo Castillo, the record owner of a property, and Libert Land Holdings 4 LLC (LLH4), which purchased a tax certificate for the property after Castillo failed to pay delinquent taxes. After the tax deed was issued, Castillo attempted to redeem the property, but the county treasurer refunded his payment because the tax deed had already been issued. Castillo then filed a declaratory judgment action, alleging that the tax deed was void due to a failure to comply with statutory notice requirements and sought to quiet title to the property in his name.The District Court for Douglas County found in favor of Castillo, declaring the tax deed void due to LLH4's failure to comply with the notice requirements under section 77-1801 et seq. of the Nebraska Revised Statutes. The court also ordered Castillo to pay taxes on the property and interest.LLH4 appealed the decision to the Nebraska Supreme Court, arguing that it had complied with all statutory requirements for notice and proof of notice required for the issuance of a treasurer’s tax deed. The Supreme Court affirmed the lower court's decision, concluding that LLH4’s application for the tax deed was deficient and that the deficiencies could not be cured by evidence adduced at trial. The court also noted plain error in the lower court's failure to determine the precise payment due from Castillo and remanded the case to the district court with directions to specify the precise amount of taxes and accrued interest to be paid by Castillo. View "Castillo v. Libert Land Holdings 4" on Justia Law

The case involves a group of appellants who allegedly purchased luxury vehicles with funds provided by Dilmurod Akramov, the owner of CBC and D&O Group. The appellants would then transfer the vehicle titles back to Akramov's D&O Group without receiving cash or equivalent in exchange. They would then claim a "trade-in credit" against the sales tax due on the purchase of a vehicle. The Arkansas Department of Finance and Administration (DFA) argued that these were not valid sales as required by Arkansas law and denied the sales-tax-refund claims.The appellants challenged the DFA's decision through the administrative review process, which affirmed the DFA's decision. The appellants then appealed to the Pulaski County Circuit Court for further review. The circuit court found that the appellants' attorney, Jason Stuart, was a necessary witness and therefore disqualified him from further representing the appellants. The court also held the appellants in contempt for failing to provide discovery per the court's order.The Supreme Court of Arkansas affirmed the circuit court's decision. The court held that the circuit court did not abuse its discretion in disqualifying Stuart. The court applied the three-prong test from Weigel v. Farmers Ins. Co., which requires that the attorney's testimony is material to the determination of the issues being litigated, the evidence is unobtainable elsewhere, and the testimony is or may be prejudicial to the testifying attorney’s client. The court found that all three prongs were satisfied in this case. The court also affirmed the circuit court's decision to strike the third amended and supplemental complaint filed by Stuart after his disqualification. View "STUART v. WALTHER" on Justia Law

The Supreme Court of Arkansas ruled in favor of the county assessor and other similarly positioned defendants, affirming the lower court's dismissal of a lawsuit brought by Ronald and Mitzi Kimbrough. The plaintiffs, representing themselves and other similarly situated taxpayers, had argued that the county assessor's method of calculating property tax assessments for homeowners over 65 or who are disabled violated the Arkansas Constitution's Amendment 79. In their view, the amendment should freeze the assessment on a homeowner's principal residence at the time of purchase. However, the defendants argued that the plaintiffs had failed to exhaust their administrative remedies, as required by law, before taking the case to court.The Supreme Court agreed with the defendants, noting that the plaintiffs' complaint must be handled by the County Court according to the Arkansas Constitution due to its relation to county taxes. The Court held that the plaintiffs had failed to exhaust the necessary administrative remedies before bringing the case to court, which deprived the court of subject-matter jurisdiction. The Court dismissed the plaintiffs' arguments about the potential policy implications of its ruling, noting that public policy is declared by the General Assembly, not the courts. Thus, the Court affirmed the lower court's dismissal of the case and dismissed the defendants' cross-appeal as moot. View "KIMBROUGH V. GRIEVE" on Justia Law

This case involves a dispute between Jennifer Zuch and the Internal Revenue Service (IRS) over the allocation of estimated tax payments and the subsequent application of those payments to pay off her tax liability. Zuch argued that the IRS erroneously applied $50,000 in estimated tax payments, which she and her then-husband had made, to her ex-husband's tax liability instead of hers. As the dispute was litigated over several years, the IRS withheld tax refunds owed to Zuch and applied them to her alleged unpaid balance, thereby satisfying it in full. The IRS then moved to dismiss the Tax Court proceeding, arguing the case was moot since there was no more tax to be paid. The Tax Court granted the motion.In appeal, the U.S. Court of Appeals for the Third Circuit vacated the Tax Court's dismissal and remanded the matter back to the Tax Court. The appellate court found that Zuch's claim was not moot, even though the IRS had satisfied her tax liability by applying her tax refunds to it. The court held that the IRS cannot unilaterally moot a case by withdrawing its proposed collection action, especially when the Tax Court has already obtained jurisdiction of a liability challenge. The court also found that a taxpayer's challenge to the tax liability at issue in an action under § 6330(c)(2)(B) of the Internal Revenue Code cannot be rendered moot by the unilateral action of the IRS. The court concluded that the Tax Court retained jurisdiction to review Zuch's liability and to determine whether she is entitled to receive credit for any amount of the estimated tax payments at issue. View "Zuch v. Commissioner of Internal Revenue" on Justia Law

The Nebraska Supreme Court affirmed a decision holding Allen Crow, a corporate officer, personally liable for unpaid use taxes of his former corporation, Direct Media Marketing, Inc. The court determined that Crow failed to rebut the presumption of correctness of the amount of use taxes assessed against Direct Media. The court further found that Crow was a responsible officer of Direct Media and willfully failed to pay Direct Media's use taxes, making him personally liable for the tax deficiency.Despite the Department of Revenue's significant delay in pursuing proceedings against Direct Media and Crow, the court did not find compelling circumstances or demonstrated prejudice that would warrant equitable relief. The court held that the doctrine of laches, which bars a party from relief due to delay, could not be applied against the government in its efforts to enforce a public right or protect a public interest. The court concluded that the delay did not absolve Direct Media and Crow of their liability. Therefore, the court affirmed the district court's order upholding the order of the Tax Commissioner that held Crow personally liable for Direct Media's unpaid taxes. View "Crow v. Nebraska Dept. of Rev." on Justia Law

The Nebraska Supreme Court ruled in a dispute involving property tax assessment after a real estate property was damaged by fire due to arson. The issue at the core of the case was whether a fire caused by arson could be considered a "calamity" under state law, thus entitling the property owner, Inland Insurance Company, to a reduction in their property's assessed value.The Tax Equalization and Review Commission (TERC) had upheld the decision of the Lancaster County Board of Equalization, maintaining the assessed value of the property without considering the damage caused by the fire as a calamity. The TERC interpreted the word "calamity" as referring only to natural events.On appeal, the Nebraska Supreme Court disagreed with TERC's interpretation of the term "calamity." The court held that the term, as used in state law, encompasses any disastrous event, not just natural disasters. The language of the law, the court reasoned, did not limit calamities to natural events. The court therefore reversed TERC's decision and remanded the case for further proceedings. The court did not consider the Board of Equalization's cross-appeal, which argued that certain tax statutes were unconstitutional, due to a procedural issue. View "Inland Ins. Co. v. Lancaster Cty. Bd. of Equal." on Justia Law

In a case regarding the timing of appeals, the Supreme Court of the State of Hawaii has clarified the interpretation of Hawaii Rules of Appellate Procedure (HRAP) Rule 4(a)(3). The case arose from a tax dispute between taxpayers Schuyler and Marilyn Cole and the City and County of Honolulu, leading to a consolidated appeal with other similar cases. In July 2017, the Tax Appeal Court granted summary judgment to the City, and the Taxpayers filed a motion for reconsideration. However, the court failed to rule on this motion within 90 days, and the court's clerk did not provide notice of automatic denial of the motion, as required by HRAP Rule 4(a)(3).The Supreme Court held that if the court clerk does not notify the parties within 5 days after the 90th day that a post-judgment motion has been automatically denied, the time to appeal starts either when the clerk provides notice to the parties or when the court enters a nullified order. The Court also held that judicial inaction cannot operate to foreclose a right to appeal. As a result, the Taxpayers' appeal clock started when the court issued its late order on the motion for reconsideration, and they filed their appeal within the 30-day window from that point, therefore the Intermediate Court of Appeals had jurisdiction over the appeal.The Supreme Court expressed concern about the potential for indefinite extension of the appeal deadline due to court and clerk oversight and suggested that the Standing Committee to Review the Hawaii Rules of Appellate Procedure may wish to consider proposing an amendment to HRAP Rule 4(a)(3). The case was remanded to the Intermediate Court of Appeals for further proceedings. View "Cole v. City and County of Honolulu" on Justia Law

In this case before the Indiana Supreme Court, Thomas DeCola, the appellant, filed a suit to quiet title after purchasing property owned by Norfolk Southern Corporation, the appellee, at a tax sale. The property had fallen into tax delinquency. DeCola sought judgment on the pleadings, arguing that Norfolk had not received proper notice of the tax sale, the petition for tax deed, or its right of redemption. The trial court converted DeCola's motion into one for summary judgment because it considered evidence outside the pleadings. In its detailed order, the trial court denied DeCola's summary judgment motion, finding the tax deed void due to lack of sufficient notice to Norfolk.DeCola appealed the denial of summary judgment, claiming it was a final order. However, the Indiana Supreme Court held that the trial court's order denying summary judgment was not a final judgment because it did not resolve all claims as to all parties. The Court stated that the order did not meet any of the five definitions of a "final judgment" as laid out in Rule 2(H) of the appellate rules. Therefore, the Court concluded that it did not have jurisdiction to hear the appeal.The Indiana Supreme Court granted transfer, dismissed the appeal for lack of jurisdiction, and remanded the case back to the trial court for further proceedings. View "DeCola v. Norfolk Southern Corporation, Inc." on Justia Law