Paul L. Caron
Dean
Pepperdine Caruso
School of Law
New Cases
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Mitchell on The Tax Treatment of Settlement Agreements
Kreig Mitchell has an interesting post on the Tax Treatment of Settlement Agreements, which discusses the recent case of Rivera v. Baker West, Inc., No. 03-17261 (9th Cir. 12/13/05): The law is not what makes these types of cases interesting. The law in this area is well settled. What makes these cases interesting is that…
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FedEx Drivers Are Employees, Not Independent Contractors
Interesting article on law.com this morning, Judge Delivers Order to FedEx: Pay Misclassified Drivers: In a decision expected to spur wage-and-hour suits in the courier industry, a judge earlier this month ordered FedEx to pay $5.3 million to a group of drivers he found had been improperly classified as independent contractors. He also ordered FedEx…
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Attorney’s Willful Failure to Pay Income Taxes Is Not a “Serious Crime”and Thus Does Not Justify Disbarment
From Howard Bashman: Attorney’s willful failure to pay income taxes did not justify order disbarring him from practice in the U.S. District Court for the Eastern District of Virginia, Fourth Circuit panel rules: Today’s ruling of the U.S. Court of Appeals for the Fourth Circuit — holding that willful failure to pay income taxes is…
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Sixth Circuit Permanently Closes “Tax Toolbox”
Howard Bashman reports today: Back in September 2004, "TaxProf Blog" had a post titled "District Court Stops Sale of ‘Tax Toolbox.’" Today the "Tax Toolbox" is one step closer to death as the U.S. Court of Appeals for the Sixth Circuit has issued a ruling affirming the permanent injunction that prohibits its creator from promoting,…
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9th Circuit: Ex-Husband Lacks Standing to Appeal Former Wife’s Grant of Innocent Spouse Relief
In Baranowicz v. Commissioner, No. 04-71327 (9th Cir. 12/23/05), the Ninth Circuit held that an ex-husband lacked standing to appeal his former wife’s grant of innocent spouse relief: In Estate of Ravetti, [37 F.3d 1393, 1394 (9th Cir. 1994),] we held that a non-requesting spouse did not have standing to challenge the tax court’s determination…
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Sheppard on Marks & Spencer: European Corporate Tax Lives Another Day
Lee A. Sheppard (Contributing Editor, Tax Analysts) has published Dowdy Retailer Prevails, European Corporate Tax Lives Another Day, 109 Tax Notes 1630 (Dec. 26, 2005), also available on the Tax Analysts web site as Doc 2005-25625, 2005 TNT 247-2. The article discusses the recent European Court of Justice verdict in Marks & Spencer Plc v.…
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Mass. Lt. Gov. Pays $700k for Vermont Vacation Home, Court Reduces Assessed Value 3 Years Later to $370k
Interesting article in yesterday’s Boston Globe, Tax Challenge Rewards Healey — in Vermont; Lieutenant Governor, Spouse Fought Bill on Vacation Home. The Massachusetts Lieutenant Governor and her husband paid $700,000 for a Vermont vacation home in 1998. Three years later, the town valued the property at $727,900. The Lt. Gov. and her husband joined four…
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Tax Court Reinstates Trial Judge’s Report in Ballard & Kanter
In Ballard v. Commissioner, 125 S.Ct. 1270 (2005), the Supreme Court reversed the judgments of the Courts of Appeals for the Seventh and Eleventh Circuits in Estate of Kanter v. Commissioner, 337 F.3d 833 (7th Cir. 2003), and Ballard v. Commissioner, 321 F.3d 1037 (11th Cir. 2003), and remanded those cases to the Tax Court…
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Tax Court: Parents Cannot Deduct Payments to Their Children’s Religious Schools, Despite Scientology Precedent
The Tax Court ruled yesterday in Sklar v. Commissioner, 125 T.C. No. 14 (12/21/05), that a couple’s tuition and fee payments to their children’s Jewish day schools are not charitable contributions because they received a substantial benefit from their payments and lacked charitable intent. For prior opinions in the case, see: Sklar v. Commissioner, T.C.…
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2d Circuit Holds Tax Court Is Real “Court,” Not IRS Lap Dog
The Second Circuit held yesterday that the Tax Court is a "court" for purposes of the Freedom of Information Act. The taxpayer had argued that the Tax Court defers to the IRS so much that it should be considered an extension of the IRS, rather than a court. The district court in Megibow v. Clerk,…
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Brannan on Marks & Spencer: Solomon on Corporate Taxes
Another interesting op-ed on the Marks & Spencer case [previously blogged here and here]: in today’s Wall Street Journal, Solomon on Corporate Taxes, by Guy Brannan (head of Linklaters’ tax practice in London): It is unusual for a court decision on a tax issue to feature on television news and prompt front-page headlines in the…
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Government Seeks Rehearing in Ballard and Lisle
Sheryl Stratton reports this morning that Government Seeks Appellate Court Rehearing in Ballard and Lisle Cases, also available on the Tax Analysts web site as Doc 2005-25609, 2005 TNT 244-1: Charging that the appeals courts’ decisions in the Ballard and Lisle cases conflict with the Supreme Court’s decision in the Ballard/Kanter case, the Justice Department…
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Briefs in DaimlerChrysler v. Cuno
Thanks to Stephen P. Carney and Ada L. Marginean of Ohio Attorney General Jim Petro’s Office, I am delighted to make available the merits and amici briefs in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir. 2004), cert. granted, Nos. 04-1704 & 04-1724, scheduled for oral argument in the Supreme Court on March 1,…
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Kovacs on Marks & Spencer Furthers Tax Harmonization
Interesting op-ed in today’s Wall Street Journal on the Marks & Spencer case [blogged here]: A Case for Tax Harmonization, by Laszlo Kovacs (Commissioner for Taxation and Customs Union of the European Union): My main priority in the direct tax field, therefore, is the creation of a common consolidated corporate taxation base in the EU.…
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New Clothing Expense Case
For those Tax Profs who love teaching the clothing expense deduction issue through the Pevsner v. Commissioner, 628 F.2d 467 (5th Cir. 1980), case: Joe Kristan has a wonderful discussion of a potentially worthy successor decided by the Tax Court last week: Deihl v. Commissioner, T.C. Memo. 2005-287. Joe recounts this testimony: Q: And describe…
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Posner v. Easterbrook: What Is a Tax Return?
Interesting opinion from the Seventh Circuit this week, Payne v. United States, No. 05-1941 (7th Cir. 12/14/05), in which Judge Richard Posner and Judge Frank Easterbrook differed over the validity of an untimely post-assessment tax return. The question arose in the context of whether a debtor can obtain a discharge in bankruptcy from a tax…
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Federal Circuit: Retroactive Tax Legislation Constitutes Breach of Contract
In First Nationwide Bank v. United States, No. 03-5128 (Fed. Cir. 12/13/05), the Federal Circuit held last week that retroactive tax legislation constituted a breach of contract. (Hat Tip: Robert Loblaw.)
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European Court of Justice Decides Marks & Spencer Case
The European Court of Justice today issued its opinion in Marks & Spencer PLC v. Halsey (Judgment C-446/03): As Community law now stands, Articles 43 EC and 48 EC do not preclude provisions of a Member State which generally prevent a resident parent company from deducting from its taxable profits losses incurred in another Member…
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State of Ohio Files Brief in Cuno v. DaimlerChrysler
The State of Ohio has filed its brief in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir. 2004), cert. granted, No. 04-1724, which held that Ohio’s investment tax credit is unconstitutional because it grants preferential tax treatment to companies to expand within the state.
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Tax Terrorists
With the approaching 232-year anniversary of the Boston Tea Party, our sister Sentencing Law & Policy Blog (and fellow nominee for the 2005 Best Law Blog Award) has an interesting post on sentencing "tax terrorists" in United States v. Dowell, No. 03-1341 (10th Cir. Dec. 6, 2005): The defendant in Dowell participated in a "plan…
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Judge Sentenced to Jail as “Tax Scam Promoter”
The Department of Justice has announced Tax Scam Promoter "Judge Rizzo" and Wife Sentenced to Prison: Tax scam promoters John J. Rizzo and his wife, Carol A. Rizzo, were sentenced, respectively, to 43 months in prison followed by three years of supervised release and 24 months in prison followed by three years of supervised release…
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Hickman on Wagnon v. Prairie Band Potowatomi Nation
Kristin Hickman (Minnesota) offers her thoughts on PrawsBlawg about the Supreme Court’s decision yesterday in Wagnon v. Prairie Band Potowatomi Nation. SCOTUSblog has more here.
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IRS Takes on Warren Buffett Over § 246A and Loses
Jasper L. Cummings, Jr. (Alston & Bird, Atlanta) has published IRS Tries to Apply DRD Limits to the King — And Fails, 109 Tax Notes 1191 (Nov. 28, 2005), also available on the Tax Analysts web site as Doc 2005-23263, 2005 TNT 228-21. Here is the Introduction: Ralph Waldo Emerson said, "When you strike at…
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Japan Abandons “iPod Tax”
Last month, we blogged press reports that Japan was considering revising its copyright law to charge royalties on digital music players — dubbed an "iPod tax." The Associated Press reports that Japan has abandoned the effort: Under [the current] system, the charge, generally 3% of the product’s wholesale price, is included in the price tag…
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Not Your Run-of-the-Mill Pro Se Taxpayer
The Tax Court yesterday released Hightower v. Commissioner, T.C. Memo. 2005-274, an unremarkable case ezcept that the taxpayer — Glenn Hightower — represented himself in an unsuccessful attempt to avoid tax on the sale of his S Corp shares for $41.5 million. The ever-understated Joe Kristan notes: This seems like deep water for a non-lawyer…