Justia Civil Procedure Opinion Summaries

In April 2017 and June 2017, Appellant Diane Zilka filed petitions with the Philadelphia Department of Revenue (the “Department”), seeking refunds for the Philadelphia Tax she paid from 2013 to 2015, and in 2016, respectively. During the relevant tax years, Appellant resided in the City, but worked exclusively in Wilmington, Delaware. Thus, she was subject to four income taxes (and tax rates) during that time: the Philadelphia Tax; the Pennsylvania Income Tax (“PIT”); the Wilmington Earned Income Tax (“Wilmington Tax”); and the Delaware Income Tax (“DIT”). The Commonwealth granted Appellant credit for her DIT liability to completely offset the PIT she paid for the tax years 2013 through 2016; because of the respective tax rates in Pennsylvania versus Delaware, after this offsetting, Appellant paid the remaining 1.93% in DIT. Although the City similarly credited against Appellant’s Philadelphia Tax liability the amount she paid in the Wilmington Tax — specifically, the City credited Appellant 1.25% against her Philadelphia Tax liability of 3.922%, leaving her with a remainder of 2.672% owed to the City — Appellant claimed that the City was required to afford her an additional credit of 1.93% against the Philadelphia Tax, representing the remainder of the DIT she owed after the Commonwealth credited Appellant for her PIT. After the City refused to permit her this credit against her Philadelphia Tax liability, Appellant appealed to the City’s Tax Review Board (the “Board”). The issue this case presented for the Pennsylvania Supreme Court's review as whether, for purposes of the dormant Commerce Clause analysis implicated here, state and local taxes had to be considered in the aggregate. The Court concluded state and local taxes did not need be aggregated in conducting a dormant Commerce Clause analysis, and that, ultimately, the City’s tax scheme did not discriminate against interstate commerce. Accordingly, the Court affirmed the Commonwealth Court order. View "Zilka v. Tax Review Bd. City of Phila." on Justia Law

The IRS may penalize taxpayers who fail to report a “listed transaction” that the agency determines is similar to one already identified as a tax-avoidance scheme, 26 U.S.C. 6707A(a), (c)(2). IRS Notice 2007-83 listed employee-benefit plans with cash-value life insurance policies. In 2013, Mann created trusts for its co-owners that paid the premiums on their cash-value life insurance policies. Mann deducted the expenses on its tax forms, and the owners counted the death benefits as income. None of them reported the trusts as a listed transaction.In 2019, the IRS determined that the trusts failed to comply with Notice 2007-83 and imposed penalties, which were paid. After the IRS refused requests for refunds, the taxpayers filed suit. The district court granted the IRS summary judgment on a claim that the Notice violated the Administrative Procedures Act’s notice-and-comment requirements. The Sixth Circuit reversed, concluding that Notice 2007- 83 was a legislative rule that lacked exemption from the requirements; “we must set [Notice 2007-83] aside” and “need not address the taxpayers’ remaining claims.”Before the district court ruled on remand, the IRS refunded the past penalties with interest and agreed not to apply the Notice to anyone within the Sixth Circuit. The district court concluded that it retained jurisdiction to set aside and vacate the Notice nationwide. The Sixth Circuit vacated. The taxpayers sought a refund of past tax penalties and prospective relief against Notice 2007-83; the IRS’s actions mooted their claim and left nothing more for the court to do. View "Mann Construction, Inc. v. United States" on Justia Law

Plaintiffs-appellants Michael Cathey and Vonderosa Properties, LLC (collectively "Vonderosa") filed suit seeking declaratory relief against Defendant-Appellee Board of County Commissioners for McCurtain County (Board) and moved for a temporary injunction to restrain and enjoin the Board from enforcing and collecting a lodging tax increase passed at a special election held in McCurtain County on November 8, 2022, in conjunction with the general election. The district court denied Vonderosa's request for a temporary injunction and Vonderosa appealed, seeking emergency relief from the Oklahoma Supreme Court. On March 28, 2023, the Supreme Court entered an Order temporarily enjoining enforcement of the 2% increase to the lodging tax until the special election was fully and finally litigated. The Court expressed no opinion concerning the validity of the special election in its emergency Order. While Appellee's petition for rehearing was still pending before the Supreme Court and before the mandate issued, the district court granted Appellee-Intervenor's Motion for Summary Judgment and held the special election was valid. The Supreme Court held that under the facts of this specific case the district court was without jurisdiction to enter summary judgment for Appellee while the appeal was pending before the Supreme Court and before mandate had issued. The District Court's Order of June 20, 2023 was void for lack of jurisdiction and the Order was vacated. The case was remanded to the district court with instructions. View "Cathey v. McCurtain County Bd. of County Comm'rs" on Justia Law

The Supreme Court reversed the decision of the circuit court granting summary judgment for Lakota Lakes and denying Emily Bialota's cross-motion for summary judgment in this quiet title action, holding that Bialota accomplished valid service on the Minnesota Secretary of State.Bialota brought an action to quiet title in Pennington County, alleging that she had fee simple ownership in real property previously owned by Lakota Lakes but later sold at a tax sale. In its summary judgment motion, Lakota Lakes claimed that it had not been validly served with the notice of intent to take tax deed, rendering the tax deed void. In her cross-motion for summary judgment, Bialota argued that service upon Lakota Lakes was proper and that Pennington County had correctly issued a tax deed based upon her affidavit of completed service. The Supreme Court reversed, holding (1) South Dakota law controlled this Court's determination whether Bialota personally served the Secretary as Lakota Lakes' registered agent; (2) Bialota accomplished valid service on the Secretary; and (3) Bialota was entitled to the tax deed to the property. View "Bialota v. Lakota Lakes, LLC" on Justia Law

Plaintiff’s CPA failed to file Plaintiff’s tax returns for three consecutive years: 2014 through 2016. In 2019, the IRS assessed Plaintiff with over seventy thousand dollars in penalties for violating Section 6651(a) of the Internal Revenue Code and barred him from applying his 2014 overpayment to taxes owed for 2015 and 2016. Plaintiff sued, arguing that his failure to file was due to reasonable cause. He also sought a refund of the penalties. The district court granted summary judgment for the government, concluding that United States v. Boyle foreclosed Plaintiff’s claims. Plaintiff appealed.   The Eleventh Circuit affirmed. The court explained that if Plaintiff’s CPA had failed to file paper tax returns, there would be no question that Boyle would have precluded a reasonable cause defense and a refund. However, the court explained that no circuit court has yet applied Boyle to e-filed tax returns. The court decided that Boyle’s bright line rule applies to e-filed returns. Thus, the court concluded that Plaintiff’s reliance on his CPA does not constitute “reasonable cause” under Section 6651(a)(1). View "Wayne Lee v. USA" on Justia Law

Petitioner FlightSafety International, Inc. appeals from the judgment entered after the trial court denied its two consolidated petitions for writs of mandate. The trial court found that FlightSafety was not entitled to mandamus relief because it had an adequate remedy at law, which it had bypassed. FlightSafety contended in the trial court that it was entitled to a decision by the Los Angeles County Assessment Appeals Board (AAB) on its assessment appeal applications within the two-year period specified in Revenue and Taxation Code section 1604, subdivision (c). FlightSafety argued the extensions had expired as a matter of law two years from the date of filing. It argued it therefore had not received timely hearings on its applications. FlightSafety asked the trial court to order the AAB to schedule hearings forthwith and, in the meantime, enter its own opinion of the value of its property on the tax assessment rolls. The trial court found writ relief was not available. Plaintiff contends the trial court erroneously found the extension agreements valid and mandamus relief unavailable.   The Second Appellate District affirmed. The court explained that none of the four cases relied upon by Petitioner considered whether the applicant had an adequate remedy for the AAB’s refusal to place the applicant’s opinion of value on the assessment rolls. Thus, none of the cases stand for the proposition that a tax refund action is an inadequate remedy in all cases seeking relief for an AAB’s action (or inaction) under section 1604. View "FlightSafety International v. L.A. County Assessment Appeals Bd." on Justia Law

At issue in this appeal was whether the Oregon Department of Revenue erred in declining to reduce the assessed value of taxpayer’s property for tax years 2018-2019 and 2019-2020. After persuading the Department that the valuation methodology it used to assess the property in 2020-2021 was flawed, the taxpayer asked the Department to use the corrected methodology to re-assess the two previous tax years. The Department denied the request, finding the statute the taxpayer used as grounds, ORS 306.115, did not authorize the Department to change its value opinion for the earlier tax years because another statute, ORS 308.624(4), expressly precluded the Department from making that change. The Oregon Tax Court agreed with the Department, and the taxpayer appealed, contending the Department and Tax Court misinterpreted the applicable statutes. The Oregon Supreme Court found no misinterpretation and affirmed. View "D. E. Shaw Renewable Investments, LLC v. Dept. of Rev." on Justia Law

Respondent Paramount Pictures Corporation (Paramount) sought a refund of taxes paid on its personal property for the 2011 tax year. Paramount first appealed to the Los Angeles County Assessment Appeals Board (the Board). The property was assessed a final value of $137,397,278. Following a hearing, the Board agreed with the valuation proposed by the Assessor and found that Paramount failed to carry its burden of demonstrating additional obsolescence. Paramount appealed the Board’s decision to the trial court. The trial court found: (1) the Board committed a methodological error in excluding Paramount’s initial income approach valuation and (2) the Board issued inadequate findings regarding the significance of Paramount’s pre-lien and post-lien sales of personal property. In a separate ruling, the trial court awarded Paramount attorney fees under Revenue and Taxation Code Section 1611.6, which allows a taxpayer to recover fees for services necessary to obtain proper findings from a county board. The County timely appealed both orders.   The Second Appellate District reversed the trial court’s decision, concluding the Board committed neither methodological error nor issued findings that were less than adequate within the meaning of section 1611.5. First, Paramount did not challenge the validity of the cost approach relied upon by the Assessor and Board, and it did not otherwise identify any legal error in the Board’s rejection of its income approach valuation. Second, the hearing transcripts adequately disclose its rulings and findings on the pre-lien and post-sales data. The court remanded so the trial court may consider the question of whether substantial evidence supports the Board’s finding that Paramount failed to establish additional obsolescence. View "Paramount Pictures Corp. v. County of L.A." on Justia Law

Taxpayer Walter Woodland appealed the Oregon Department of Revenue’s assessment of $116 in interest for unpaid estimated taxes in 2019. During the pendency of that appeal, the department invalidated the assessment and agreed that taxpayer did not owe that interest. The Regular Division of the Oregon Tax Court accordingly dismissed taxpayer’s appeal as moot. The Oregon Supreme Court affirmed. View "Woodland v. Dept. of Rev." on Justia Law

Defendants appealed from a judgment of the district court awarding the United States $112,324.18, plus statutory additions and interest, in connection with an unpaid tax assessment from 2007. The district court granted summary judgment in favor of the government, notwithstanding the fact that the Internal Revenue Service (the “IRS”) referred the assessment to the Department of Justice (the “DOJ”) before formally rejecting Defendants’ proposed installment agreement. Defendants contended that this referral violated the provisions of the Internal Revenue Code and the implementing Treasury Regulations that curb the IRS’s collection activities while a proposed installment agreement remains on the table.   The Second Circuit affirmed. The court explained that as their plain terms indicate, the suspension provisions of Section 6331(i) and (k) prohibit the commencement of a collection action in court during specified periods, not the IRS’s antecedent request that the DOJ file such an action. The court wrote that the Internal Revenue Code is silent on when the IRS may refer an action to the DOJ, and a Treasury Regulation that limits the IRS’s referral power cannot read into the statute something that is not there. Further, this conclusion is not altered because authorization from the Treasury Secretary is a prerequisite to commencing an in-court proceeding.   Further, the court explained that Defendants have not claimed a violation of their constitutional rights and the regulatory limits on IRS referrals of collection actions are not statutorily derived. As a result, Defendants must demonstrate prejudice for the government’s regulatory violation to invalidate the instant collection action. The court found that Defendants have failed to do so. View "United States v. Schiller" on Justia Law