Paul L. Caron
Dean
Pepperdine Caruso
School of Law
New Cases
-
Texas Supreme Court to Decide Constitutionality of ‘Pole Tax’
The Texas Supreme Court has decided to decide the constitutionality of a $5 per-person "pole tax" on patrons of strip clubs and other adult entertainment venues. Combs v. Texas Entertainment Ass’n, No. 03-08-00213-CV (Tex. Ct. App. June 5, 2009). Austin American Statesman Dallas Morning News Houston Chronicle Prior TaxProf Blog coverage: Texas Imposes "Pole Tax" on Strip…
-
8th Cir.: § 162(k) Precludes Deduction for ESOP Distributions
The Eighth Circuit yesterday joined the Tax Court (131 T.C. 29 (2008)) in holding that § 162(k) precludes a company from deducting $9.4 million in cash distribution dividends paid on the redemption of stock held in an ESOP. Nestle Purina Petcare Co. v. Commissioner, No. 09-1381 (8th Cir. Feb. 9, 2010). The Eighth Circuit followed its prior decision in…
-
DOJ Fights for Dow Chemical-Deloitte Tax Work Papers in D.C. Circuit
The Blog of Legal Times, DOJ Continues Fight for Deloitte Records on Appeal in D.C.: The Justice Department wants to convince a federal appeals court in Washington that the accounting firm Deloitte should be forced to give up tax documents stemming from auditing services provided to Dow Chemical Company. Judge Richard Leon of the U.S.…
-
Tax Court: Gender Reassignment Surgery Is a Deductible Medical Expense (But Not Breast Augmentation)
In a long-awaited decision, a fractured (8-5-3) Tax Court today ruled in O’Donnabhain v. Commissioner, 134 T.C. No. 4 (Feb. 2, 2010), that male-to-female gender reassignment surgery qualifies as a deductible medical expense under § 213, reversing the IRS's position in Chief Counsel Advice 200603025. The 8-judge majority held that: TP's gender identity disorder is a…
-
5th Cir.: Debt Interests Are Not Eligible for § 2057 Estate Tax Deduction
The Fifth Circuit on Thursday (Artall v. Commissioner, No. 09-60092 (5th Cir. Jan. 28, 2010)) joined the Eighth Circuit (Estate of Farnam v. Commissioner, 583 F.3d 581 (8th Cir. 2009)) and Tax Court (Estate of Farnam v. Commissioner, 130 T.C. No. 2 (Feb. 4, 2008); Artall v. Commissioner, T.C. Memo. 2008-67 (Mar. 18, 2008)) in holding…
-
California Man Pleads Guilty to Filing 250 Tax Returns for Dead People, Claiming $2m in Refunds
From a Department of Justice press release: Haroon Amin of Upland, Calif., pleaded guilty Monday to conspiracy to defraud the United States … In December 2008, Amin and Ather Ali of Diamond Bar, Calif., were indicted by a federal grand jury in Riverside, Calif., on charges of engaging in a scheme to file false returns with…
-
Textron Amicus Briefs
Here are the eleven amicus briefs filed in the U.S. Supreme Court (No. 09-750) by yesterday's deadline, supporting Textron's certiorari petition seeking review of the First Circuit's 3-2 en banc decision in United States v. Textron, Inc., No. 07-2631 (1st Cir. Aug. 13, 2009), which reversed the 2-1 panel decision and held that Textron's tax accrual work…
-
Taxing Directors or Shareholders on Corporate Political Contributions After Citizens United
Tax lawyer Dan Evans writes, Taxing Political Expenditures: The Supreme Court's recent decision in Citizens United v. Federal Election Commission severely restricts the ability of Congress to regulate, much less prohibit, the use of corporate money to influence elections, but what about Congress's power to tax that money? As it is now, corporations cannot claim…
-
Tax Lawyers Sentenced to 60 Hours/Year Giving Speeches ‘Explaining Dangers of Misleading the IRS’
Following up on my prior post, Four E&Y Partners Convicted on All Counts in Tax Shelter Fraud: New York Law Journal, Tax Lawyers' Sentences Include 'Explaining Dangers of Misleading IRS': Southern District of New York Judge Sidney Stein gave a special assignment to two lawyers he sentenced Thursday in connection with the Ernst & Young…
-
Tax Court Lacks Jurisdiction to Block Release of Private Letter Ruling
The Tax Court held yesterday that it lacks jurisdiction to prevent the IRS from publicly disclosing a taxpayer's properly redacted private letter ruling. Anonymous v. Commissioner, 134 T.C. No. 2 (Jan. 19, 2009).
-
Taxpayers Win 14% of Tax Cases
Blog of the Legal Times, Fighting the IRS: Your chances of winning a fight with the IRS are about as great as your chances when fighting City Hall. National Taxpayer Advocate Nina Olson, in her recently-released annual report to Congress, listed the 10 tax issues most litigated in the federal courts. Of the 923 cases…
-
D.C. Circuit: Tax Court Lacks Jurisdiction to Determine Partners’ Outside Basis in Son of BOSS Case
The D.C. Circuit yesterday ruled on the Tax Court's jurisdiction in a Son of BOSS case. Petaluma FX Partners LLC v. Commissioner, No. 08-1356 (D.C. Cir. Jan. 1, 2010): Petaluma FX Partners, LLC appeals from the Tax Court’s decision that it had jurisdiction over several partnership-level determinations and that valuation misstatement penalties applied. Specifically, the Tax Court…
-
WSJ: Decision May Open Floodgates on Deductibility of M.B.A. Expenses
Following up on last month's post, Tax Court Allows Nurse to Deduct Cost of University of Phoenix MBA: the Wall Street Journal reports on the Tax Court's recent decision, Singleton-Clarke v. Commissioner, T.C. Summ. Op. 2009-182 (Dec. 2, 2009), in Nurse Outduels IRS Over M.B.A. Tuition: How One Woman Went to Tax Court and Won Deduction:…
-
Court Rejects 26 BOA SILO Tax Shelters
The U.S. Court of Federal Claims on Friday disallowed 26 SILO tax shelters claimed by Wells Fargo & Co. Wells Fargo & Co. v. United States, No. 06-628T (Fed. Cl. Jan. 8, 2010): The SILO transactions here are offensive to the Court on many levels. A cadre of company executives, in concert with teams of well known…
-
Court Applies Deliberative Privilege to P&G’s $1 Billion Charitable Deduction
The U.S. District Court here in Cincinnati has decided a dispute over the application of the deliberative privilege in a case involving $1 billion in charitable deductions claimed by Proctor & Gamble. Proctor & Gamble Co. v. United States, No. 1:08-cv-608 (S.D. OH, Dec. 31, 2009). Among the claimed charitable deductions were P&G's donations of intellectual property technologies and…
-
UBS Whistleblower Files Complaint Against DOJ Lawyers
UBS tax whistleblower Bradley Birkenfeld has filed a complaint today with the U.S. Department of Justice Office of Professional Responsibility (OPR) seeking a formal investigation into incomplete and misleading statements made by attorneys for the Justice Department. Complaint National Whistleblowers Center press release Associated Press Bloomberg Reuters (Photo courtesy of whistleblowers.org.)
-
Two NYC Partners Suspended for Tax Evasion
John J.P. Howley (former partner, Kaye Scholer) (In re Howley, 2009 N.Y. Slip. Op. 09410 (N.Y. App. Div. 1st Dep't, Dec. 17, 2009)) and Ronald A. Goldman (former partner, Manning Raab Dealy & Sturm) (In re Goldman, (2009 N.Y. Slip. Op. 09409 (N.Y. App. Div. 1st Dep't, Dec. 17, 2009)) were suspended by the New York Appellate Division for nonpayment of taxes. (Mr. Howley failed…
-
Textron Files Cert. Petition in Tax Work Papers Case
On Christmas Eve, Williams & Connolly filed this 161-page cert. petition on behalf of Textron, asking the Supreme Court to review the First Circuit's 3-2 en banc decision (United States v. Textron, No. 07-2631 (1st Cir. Aug. 13, 2009)) holding that Textron's tax accrual work papers were not protected under the work product doctrine and thus had to…
-
Tax Court: § 2035(b) Applies to Gift Tax on Deemed Gift of QTIP Remainder
The Tax Court on Monday held that the amount of gift tax paid by the doness of deemed gifts of a remainder interest in QTIP property is includable in the decedent's gross estate under § 2035(b). Estate of Morgens v. Commissioner, 133 T.C. No. 17 (Dec. 21, 2009): Creating an exception from § 2035(b) for gift tax paid with respect to deemed…
-
WSJ: Tax Court Lets DUI Driver Write Off Car Damage
Following up on Friday's post, Tax Court Allows Driver Cited for DUI in Accident to Deduct Car Damage as Casualty Loss Because He 'Only' Blew a .09: in today's Wall Street Journal, Tax Court Lets DUI Driver Write Off Car Damage, by Arden Dale: Drink, drive, crack up the car…and write off the damage on…
-
District Court Decides G-I Holdings
The U.S. District Court for the District of New Jersey on Wednesday decided In re G-I Holdings, No. 02-3082 (D. N.J. Dec. 14, 2009): [T]he Government is seeking to recover unpaid tax liabilities from the Debtors, arguing that GAF’s transfer of property in the 1990 transaction was actually a taxable disguised sale of property under §…
-
Colorado Supreme Court: Prosecutors Can’t Root Around Immigrants’ Tax Records
Following up on my prior posts (here and here): the Colorado Supreme Court ruled yesterday in a 4-3 decision that prosecutors had improperly searched a tax preparer's records for evidence that undocumented immigrants had used others’ Social Security numbers. People v. Gutierrez, No. 09SA69 (Colo. Dec. 14, 2009). ABA Journal Associated Press Denver Post L.A. Times
-
5th Cir. Admits Ex-Wife’s Testimony About Ex-Husband’s Tax Evasion
The Fifth Circuit recently allowed an ex-wife's testimony about conversations she had with her ex-husband about his tax evasion to be admitted at the husband's trial under the joint crimes exception to the martial communications privilege even thought he ex-wife was not charged with tax evasion herself. United States v. Miller, No. 08-31168 (5th Cir. Nov. 20,…
-
Texas Legislator Files Amicus Brief in Support of ‘Pole Tax’
Following up on my prior post, Texas "Pole Tax" on Strip Club Patrons Ruled Unconstitutional: Texas Lawyer, Texas Legislator Files Atypical Amicus Brief in Support of "Pole Tax": Legislators rarely send amicus briefs to the Texas Supreme Court explaining why a law was passed, because the court usually doesn't listen anyway, two experts say. However,…
-
Tax Court Allows Driver Cited for DUI in Accident to Deduct Car Damage as Casualty Loss Because He ‘Only’ Blew a .09
The Tax Court yesterday held held that an individual involved in a traffic accident when driving while intoxicated could claim a casualty loss deduction for damages to his car. Rohrs v. Commissioner, T.C. Summ. Op. 2009-190 (Dec. 10, 2009) (citations omitted): On August 12, 2005, petitioner purchased a 2006 Ford F-350 pickup truck for $40,210.65. On October 28,…