Paul L. Caron
Dean
Pepperdine Caruso
School of Law
New Cases
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Hickman: Goodbye National Muffler! Hello Administrative Law?
Kristin Hickman (Minnesota), Goodbye National Muffler! Hello Administrative Law?: With today’s opinion in Mayo Foundation for Medical Education & Research v. United States, No. 09-837 (Jan. 11, 2011), the Supreme Court has finally and decisively rejected the notion of tax exceptionalism in judicial review standards. For years now, the tax community has debated whether Chevron…
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Zelinsky: New York Appellate Division Upholds ‘Amazon’ Law
Edward A. Zelinsky (Cardozo) has posted New York Appellate Division Upholds ‘Amazon’ Law: Analysis, 59 State Tax Notes ___ (2011), on SSRN. Here is the abstract: In Amazon.com LLC v. New York State Department of Taxation and Finance, the Appellate Division of the New York Supreme Court upheld and remanded New York’s “Amazon” law. The appeals…
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5th Circuit Tax Survey
William D. Elliott has published Fifth Circuit Survey — Taxation, 42 Tex. Tech. L. Rev. 825 (2010). Here is the Introduction: The period between June 1, 2008 to June 30, 2009 reveals eighty-nine Fifth Circuit cases that touch federal taxation. Of these, only four cases warrant discussion. A common refrain among tax lawyers is that the quantity…
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U.S. Bank Sues FDIC for Bad Tax Advice
The Blog of Legal Times, U.S. Bank: FDIC Should Cover Cost of Bad Tax Advice: U.S. Bank has filed a federal suit in Washington against the Federal Deposit Insurance Corp., alleging that the failed bank for which the FDIC was acting as receiver gave U.S. Bank bad tax advice that cost it millions in IRS…
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Deutsche Bank Admits Guilt, Pays $553.6m Fine, in Tax Shelter Case
Deutsche Bank yesterday agreed to pay a $553.6 million fine and admit criminal wrongdoing in connection with selling fifteen different tax shelters to 2,100 customers. U.S. Attorney Press Release Bloomberg New York Times Wall Street Journal WSJ Law Blog
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West Ordered to Pay $5.2m to Two Law Profs in Dispute Over Treatise
I previously blogged (links below) the lawsuit by David Rudovsky (Penn) and Leonard N. Sosnov (Widener) against West, claiming that they were falsely identified as the authors of a poorly researched “sham” supplement to their treatise, Pennsylvania Practice: Criminal Procedure Law, Commentary and Forms. The authors stopped working on the treatise when West cut their annual…
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IRS Agent Charged With Stealing $160k of Tax Refunds
NBC New York, IRS Agent Accused of Stealing Tax Refunds: Fern Stephens, a revenue officer at the IRS, is being charged by the U.S. Attorney’s office for stealing more than $160,000 in unclaimed tax funds from 12 taxpayers, according to federal court documents. If convicted of all counts of mail fraud, theft of gonvernment funds,…
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Court: FedEx Drivers Are Independent Contractors, Not Employees
The U.S. District Court for the Northern District of Indiana has held in a consolidated, multi-district class action that most FedEx drivers are independent contractors rather than employees. In re FedEx Ground Package System, Inc., No. 3:05-cv-00390 (Dec. 13, 2010). Bloomberg New York Times Wall Street Journal
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Divided Tax Court Allows Parsonage Allowance for Minister’s Two Homes
A sharply divided Tax Court (5-2-6) yesterday held that Christian singer Phil Driscoll and his wife could exclude from income parsonage allowances on both their principal residence and a vacation home in these amounts: Principal Residence Vacation Home 1996 $78,469 $25,843 1997 $42,708 $70,708 1998 $71,704 $116,309 1999 $87,254 $195,779 Discoll v. Commissioner, 135 T.C. No.…
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Tax Court Denies Deductions for Lawyer’s ‘Pursuit of the Unified Life’
Pace v. Commissioner, T.C. Memo. 2010-272 (Dec. 13, 2010): [Dean F. Pace is] one man in three parts. As Dean Pace, Esq., he has practiced law for over 50 years and become an unusually successful attorney specializing in qui tam litigation — as he himself testified: “I don’t think anyone is equal to me in…
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SEC Charges ex-Deloitte Tax Partner with Insider Trading
The SEC yesterday filed a civil complaint against former Deloitte tax partner Arnold McClellan and his wife for passing confidential information on seven confidential buyouts planned by Deloitte clients to family members, who reaped over $3 million in profits trading on the tips. SEC Complaint SEC Litigation Release SEC Press Release Blog of Legal Times Bloomberg Financial Times Fortune Going Concern…
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Is Failure to Support Obama Administration’s Foreign Policy Grounds to Deny Charity’s Tax-Exempt Status?
Following up on my prior posts: NY Times: Charitable Deduction Subsidizes Israeli Settlements, Contrary to U.S. Policy (July 7, 2010) Lawsuit: IRS Using Bob Jones University to Deny Tax-Exempt Status to Pro-Israel Charity (Aug. 26, 2010) Z Street issued this press release on Monday: Z STREET, an organization devoted to pro-Israel public education, today filed in…
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9th Cir.: Minor Child (Secondary Beneficiary of Father’s Retirement Account) Liable for Tax on Distribution After Mother (Primary Beneficiary) Kills Father
The Ninth Circuit ruled on Monday that a minor child of a woman who killed her husband (the child’s father) was liable for the tax on a distribution from his father’s retirement account as its “distributee” because the wife, although listed as the plan’s primary beneficiary, was ineligible under Oregon law to receive a distribution from the plan. D.N. v.…
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9th Cir. Rejects CLS’s Claim That UC-Hastings Selectively Enforced Nondiscrimination Policy
On remand from the Supreme Court (Christian Legal Society v. Martinez, No. 08-1371 (June 28, 2010)), the Ninth Circuit yesterday refused to consider the Christian Legal Society’s claim that UC-Hastings had selectively enforced its nondiscrimination policy on the ground that CLS had not raised the argument early enough in the proceeding. Christian Legal Society v. Wu,…
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2d Cir.: Attorney Who Pevails in Personal Tax Case Cannot Recover Attorneys’ Fees From IRS
The Second Circuit has held that an attorney who prevails in his presonal tax case cannot recover attorneys’ fees under § 7430. United States v. Hudson, No. 09-3600 (2d Cir. Nov. 10, 2010): In other statutory contexts, this Court has ruled that a lawyer appearing pro se is not entitled to attorney’s fees. But we have not…
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IRS Throws in Towel on Closely Watched International Tax Case
The Recorder, IRS Throws in Towel on Closely Watched International Tax Case: Attorneys from Baker & McKenzie in Palo Alto and Chicago are celebrating after beating the IRS in a complicated transfer pricing case that’s been closely watched by tech companies and international tax lawyers. The case involved Cupertino-based Veritas Software Corp., which was acquired…
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Tax Court Again Rejects Geithner/TurboTax Defense
The Tax Court yesterday again rejected a husband and wife’s use of the “Geithner defense” and held that blaming tax preparation software for errors on their return did not excuse them from penalties. Au v. Commissioner, T.C. Memo. 2010-247 (Nov. 10, 2010): Petitioners contend that they followed the instructions on the [Tax Cut] tax preparation software that they used…
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Estate of Edith Windsor Challenges Denial of Marital Deduction to Gay/Lesbian Couples
The estate of the late lesbian rights activist Edith Windsor filed a refund claim in U.S. District Court on the ground that the IRS unconstitutionally failed to allow her an unlimted marital deduction even though she had married Thea Spyer in Canada in 2007 after 41 years togerther. Democracy Now!, Lesbian Activist Challenges Federal Gay Marriage Ban New…
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Tax Court Denies Charitable Deduction for Home Demolished by Fire Department in Training Exercise
The Tax Court yesterday held that held a married couple could not claim a charitable contribution deduction for a house that they donated to a local fire department for training purposes because they failed to prove that the fair market value of the house exceeded the benefit they received by having the fire department burn down the house.…
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DOJ Sues Former Seyfarth Shaw Partner Over DAD & DAT Tax Shelters
The Department of Justice yesterday issued this press release: The United States has asked a federal court in Chicago to permanently bar John E. Rogers, a Chicago tax lawyer and former partner at Seyfarth Shaw LLP, from promoting tax shelters that allegedly use distressed Brazilian debt to illegally lower customers’ reported income, the Justice Department…
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Billionaire Proves He Was Not in NYC 2 Days, Saves $47m in Taxes & Interest
Forbes, Billionaire Julian Robertson Notches Tax Win For New York City Non-Residents, by Janet Novack: A divided three-member New York State Tax Appeals Tribunal has upheld an administrative judge’s finding that billionaire hedge fund pioneer Julian H. Robertson Jr. wasn’t a resident of New York City in 2000, saving him $27 million in tax. [In…
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9th Cir. Rejects Government’s Subpoena of Skadden Opinion Documents in Quellos Tax Shelter case
The Ninth Circuit yesterday dismissed an appeal of a district court order compelling Skadden, Arps, Slate, Meagher & Flom to turn over documents related to tax shelter opinion letters it authored for the Quellos Group. The Ninth Circuit held that the guilty pleas rendered the issue moot, rejecting the Government’s attempt to use the documents in sentencing the defendants. United States v. Krane, No.…
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DOJ Dismisses UBS Tax Evasion Case
The Justice Department today dismissed its criminal tax evasion case against UBS. ABC News Bloomberg Reuters USA Today Wall Street Journal
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Former Jenkens & Gilchrist Partner Pleads Guilty in Tax Shelter Fraud
Bloomberg, Chicago Lawyer Pleads Guilty in Tax-Shelter Fraud That Brought Down Firm: A Chicago attorney pleaded guilty to conspiracy and tax evasion charges for his role in a billion- dollar phony tax-shelter scheme that brought down his law firm in 2007. Erwin Mayer, 47, a former attorney at the defunct law firm Jenkens & Gilchrist,…
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Forbes: Ameriprise Caught In Stephen Yagman Tax Mess
Forbes, Ameriprise Caught In Stephen Yagman Tax Mess, by Janet Novack: The IRS is still looking to collect back taxes owed since the 1990s by controversial Los Angeles civil rights lawyer Stephen Yagman. He’s now a resident of the Metropolitan Detention Center in LA, serving three years for his 2007 conviction for tax evasion, bankruptcy…