Paul L. Caron
Dean
Pepperdine Caruso
School of Law
New Cases
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District Court Orders IRS to Turn Over Data to TRAC
The Transactional Records Access Clearinghouse (TRAC) of Syracuse University announced yesterday that a federal district court has ordered the IRS to turn over extensive statistical information to Susan Long, the co-director of TRAC: In the ruling, Judge Marsha Pechman of the U.S. District Court for the Western District of Washington upheld a permanent court order…
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Tax Court Treats Marketing of Tax Scam as Hobby
Sears v. Commissioner, T.C. Summ. Op. 2006-47 (4/3/06), offers a fascinating look at "multi-level" marketing of bogus tax reduction schemes. The taxpayer, who earned $46,100 at a full-time job at a computer software company, began selling “The Tax Relief System.” The pitch was that by establishing a “home-based business” activity, a taxpayer could convert personal…
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2d Circuit Affirms Tax Shelter Settlement
In an opinion released today, the Second Circuit upheld the class action certification and settlement with Jenkens & Gilchrist arising out of tax shelters allegedly devised with Deutsche Bank and allegedly marketed by BDO Seidman, but held that that the contribution and indemnity provisions insufficiently protect the rights of nonsettling defendants and third parties. (Hat…
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Court: NYC T&E Lawyer Used Undue Influence to Take Elderly Parents’ Long Island Home
Interesting article in today’s New York Law Journal: Lawyer’s Purchase of Home From Parents Found Too Good to Be True, by Anthony Lin: By any standard, Manhattan trusts and estates lawyer Edward F. Campbell Jr. got a great deal on his house in ultra-exclusive Lloyd Harbor on Long Island’s North Shore. For no down payment…
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NLJ on Rumsfeld v. FAIR: Good Ruling, Bad Policy
Interesting op-ed in this week’s National Law Journal: Good Ruling, Bad Policy, by Thaddeus Hoffmeister: Rumsfeld v. Forum for Academic and Institutional Rights (FAIR), however, is not the answer, as made evidently clear by the recent 8-0 Supreme Court vote. (Judge Samuel A. Alito Jr. did not hear oral arguments, so he did not participate…
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NY Cannot Tax Law Firm Income Received by Retired Tax Partner Living in Florida
Interesting article in today’s New York Law Journal on the case of Matter of McDermott, No. 820099 (N.Y. Div. of Tax Appeals, 2/2/06), holding that New York State cannot tax the share of law firm income received by a retired New York City tax partner now living in Florida. The case has nationwide implications, as…
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My Life. My Card. My Income.
The Tax Court today decided Martins v. Commissioner, T.C. Summary Opinion 2006-43 (3/22/06), which explains the tax consequences of failing to pay off credit card debts. Mr. Martins was unable to pay the $21,800 he owed to American Express, which hired a collection agency to help it collect payment. Mr. Martins eventually paid $15,000, and…
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André Agassi v. British Taxman: 3rd Set
Interesting English tax case involving André Agassi, as reported in today’s Telegraph: Tax on Stars Is Unfair, Says Agassi as £500m Battle Goes to Lords, by Adam Lusher: It is the match that pits Gordon Brown against André Agassi supported by Britney Spears, Tiger Woods and the Williams sisters. Tony Blair may not be taking…
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Supreme Court Releases Transcript of Oral Argument in Cuno
The Supreme Court has released the transcript of the oral argument in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir. 2004), cert. granted, Nos. 04-1704 & 04-1724. The case involves the constitutionality of Ohio’s investment tax credit (as well as the procedural question of Respondents’ standing). Among many interesting exchanges was this between Peter…
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H&R Block Responds to Spitzer Lawsuit
On Wednesday, we blogged New York Attorney General Eliot Spitzer’s $250 million lawsuit against H&R Block, accusing the nation’s largest tax preparation service of fraudulently pushing clients to invest their tax refunds in Express IRS, which allegedly had high fees and low returns. Mark A. Ernst, Chairman & CEO of H&R Block, has published a…
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Judge Orders Locks Changed on Tax Preparer’s Door, Notice Posted on “Door or Widow”
Interesting lead in a story in the St. Paul Pioneer Press: A federal judge on Wednesday ordered the locks changed on the front door of a St. Paul tax preparer who ignored a court order to stop preparing federal income tax returns. The case is United States v. Sonibare & Liberty Financial Group, Inc., Civil…
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Tax Court Decides Procedural Issues in Kanter
The Tax Court today decided Kanter v. Commissioner, T.C. Memo. 2006-46 (3/16/06), denying the estate’s motion for abatement of assessments under § 7486 and Estate of Smith v. Commissioner, 115 T.C. 342 (2000), and granting the IRS’s motion to stay further proceedings until final decisions are entered in the underlying deficiency cases.
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More Reactions to Rumsfeld v. FAIR and the Solomon Amendment
Following up on my March 7 post, Reactions to Rumsfeld v. FAIR: here are more post-mortems on the Supreme Court’s unanimous upholding of the Solomon Amendment in Rumsfeld v. FAIR [blogged here]: New York Times: Adam Litvak, Supreme Court Smackdown: Hundreds of law professors at the nation’s finest law schools, representing the all-but-unanimous views of…
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California LLC Gross Receipts Tax Ruled Unconstitutional
In Northwest Energetic Services LLC v. California Franchise Tax Board, No. CGC 05-437721 (Mar. 3, 2006), the California Superior Court in San Francisco held that the California gross receipts tax levied on LLCs violates the Commerce Clause. (Hat Tip: Myreon M. Hodur.) Update: Joe Kristan has a detailed analysis of the decision here.
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8th Circuit Reverses Tax Court in Robinette CDP Case
The Eighth Circuit today, in Robinette v. Commissioner, No. 04-3600 (8th Cir. Mar. 8, 2006), reversed the Tax Court (123 T.C. No. 5 (2004)): After James M. Robinette was found to be in default of an offer-in-compromise, the Internal Revenue Service (“IRS”) imposed a levy for the amount remaining due on his original compromised liability.…
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WSJ on Preparing Your 2005 Taxes
Tom Herman has two interesting articles in today’s Wall Street Journal: Picking the Best Tax Software: The complexities of the U.S. tax system are driving more people into the arms of tax-preparation software companies. Intuit Inc., parent company of TurboTax, long the nation’s top-selling brand, says total TurboTax federal unit sales rose 11% through Feb.…
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Reactions to Rumsfeld v. FAIR
Reactions to the Supreme Court’s unanimous opinion yesterday in Rumsfeld v. FAIR (blogged yesterday), which upheld the Solomon Amendment’s requirement that law schools allow military recruiters the same access to students afforded any other recruiter or forgo certain federal funding: Law Schools: George Mason Georgetown Michigan Yale Bloggers: Roger Alford (Opinio Juris) Ann Althouse (Althouse)…
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Supreme Court Unanimously Upholds Solomon Amendment
The Supreme Court this morning unanimously upheld the Solomon Amendment in Rumsfeld v. Fair: The Solomon Amendment gives universities a choice: Either allow military recruiters the same access to students afforded any other recruiter or forgo certain federal funds…. The Solomon Amendment neither limits what law schools may say nor requires them to say anything.…
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6th Circuit: Tax Shelter Investors as “Ostriches”
In Mortenson v. Commissioner, No. 05-1344 (6th Cir. Feb. 28, 2006), the Sixth Circuit affirmed the Tax Court’s conclusion (T.C. Memo. 2004-279) that an unsophisticated taxpayer who invests in a fraudulent tax shelter is nevertheless liable for negligence penalties. Glenn Mortensen invested in the "1000 lb. Tax Shelter," which involved cattle breeding partnerships. The IRS…
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Tax Court Denies Deduction for Expenses of Itinerant Pastor
Interesting Tax Court case released today: Boyd v. Commissioner, T.C. Summary Opinion 2006-36 (3/2/06). William Boyd is a Pentecostal evangelist and his wife is a singer who performs during his services. The Boyds do not have a home church and instead travel throughout the country in a RV and conduct religious services at other churches. …
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How to Tell That Your Oral Argument Is Not Going Well
A sign that your oral argument at the Supreme Court is not going well: "The subject matter was extremely technical, and near the end of the argument Justice Ruth Bader Ginsburg dozed in her chair. Justices David Souter and Samuel Alito, who flank the 72-year-old, looked at her but did not give her a nudge."…
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Press Coverage of Cuno Oral Argument
Press coverage of yesterday’s oral argument in DaimlerChrysler, Inc. v. Cuno: Associated Press Boston Globe Cleveland Plain Dealer Forbes Knight Ridder Law Blog (Wall Street Journal) New York Times Philadelphia Inquirer Reuters Tax Policy Blog (Tax Foundation) USA Today Wall Street Journal Washington Post
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Oral Argument in Cuno Today
The Supreme Court hears oral argument at 10:00 a.m. this morning in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir. 2004), cert. granted, Nos. 04-1704 & 04-1724. The case involves the constitutionality of Ohio’s investment tax credit (as well as the procedural question of Respondents’ standing). Peter D. Enrich (Northeastern), one of the attorneys…
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Tax Analysts Wins Another FOIA Round Against the IRS
In Tax Analysts v. Internal Revenue Service, No. 2005-0934 (D.C. DIst. Ct. 2/27/06), the U.S. District Court for the District of Columbia held that the IRS must make public all chief counsel advice, even that rendered in less than two hours. Opinion Order Tax Analysts Report
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Cummings on Fourth Circuit Rigidity
Jasper L. Cummings, Jr. (Alston & Bird, Atlanta) has published Fourth Circuit Rigidity, 110 Tax Notes 905 (Feb. 20, 2006), also available on the Tax Analysts web site as Doc 2006-2814, 2006 TNT 35-42. Here is the Introduction: The U.S. Supreme Court has reversed the Fourth Circuit’s ruling that, for purposes of determining diversity jurisdiction…