Justia U.S. D.C. Circuit Court of Appeals Opinion Summaries

Appellants appealed the tax court's decision, holding that the period to assess taxes for tax year 1999 against Jack Gaughf and his wife remained open as of March 30, 2007, when the IRS issued a Notice of Final Partnership Administrative Adjustment (FPAA) to Gaughf Properties, L.P. The court affirmed the tax court's holding that (1) the Gaughfs' tax liability came within the unidentified partner exception to the general three-year statute of limitations under I.R.C. section 6229(e) because the Gaughfs were not identified as indirect partners to Gaughf Properties, L.P. in its 1999 return and (2) information identifying them as indirect partners was not otherwise timely furnished to the Secretary of the Treasury so as to trigger the one-year limitation period in I.R.C. section 6229(e). View "Gaughf Properties, L.P. v. Commissioner, IRS" on Justia Law

Appellant traveled from South Korea to the United States and, while present in the United States, he gambled at slot machines frequently. The IRS contended that appellant must pay taxes on every winning pull at the slot machine and appellant disputed that interpretation pursuant to Tax Code 871, arguing that the IRS should calculate his winnings on at least a per-session basis. The court concluded that Section 871 allowed non-resident aliens, such as appellant, to calculate winnings or losses on a per-session basis. Accordingly, the court reversed the judgment of the Tax Court and remanded to the Tax Court so the parties could determine the proper amount of appellant's tax liability. View "Park, et al. v. Commissioner of IRS" on Justia Law

Appellee sought a preliminary injunction against the enforcement of provisions of the Prevent All Cigarette Trafficking Act (PACT Act), 15 U.S.C. 375, that required him to pay state and local taxes and banned him from sending his products through the U.S. mail. The district court enjoined the enforcement of the tax provision on due process grounds, but otherwise dismissed appellee's claims. Both parties appealed. The court concluded that the district court did not abuse its discretion by entering a preliminary injunction where appellee was likely to succeed on the merits on his due process challenge; the district court did not abuse its discretion in determining where the public interest lies; and the district court did not abuse its discretion when it concluded that appellee was likely to suffer irreparable harm and that the balance of the equities tipped in his favor. Further, the court affirmed the district court's dismissal of appellee's remaining claims. View "Gordon v. Holder, Jr., et al." on Justia Law

FTM applied to the IRS for a charitable tax exemption under I.R.C. 501(a) and (c)(3) based on its trustee services. FTM subsequently filed this action seeking a declaration that it was a tax exempt charitable organization after the IRS preliminarily denied it's application. The court affirmed the district court's grant of summary judgment in favor of the government, agreeing with the district court that FTM was not operated exclusively for charitable purposes. View "Family Trust of MA, Inc. v. United States" on Justia Law

Morpho, a California-based corporation that designs and builds explosives and other threat detection technology, contracted with the FAA on behalf of its then-newly established TSA, to supply its Explosive Detection System (EDS) to United States airports. Morpho subsequently sought an increase of the contract price to compensate for state assessments as "after-imposed taxes" pursuant to Clause 3.4.2-7(c) of the Acquisition Management System (AMS). The court denied Morpho's petition for review, agreeing with the TSA's rejection of Morpho's claim on the ground that the taxes at issue did not satisfy the after-imposed tax exception's precise terms. View "Morpho Detection, Inc. v. TSA" on Justia Law

Appellants challenged the IRS's deficiency finding, as well as an accuracy-related penalty. On appeal, appellants argued that the Tax Court misunderstood relevant law when it affirmed the IRS's calculation of their remaining basis in their S corporation. They also challenged the factual basis for the Tax Court's decisions affirming the Service's rejection of their over-reporting claim and upholding its imposition of the penalty. The court rejected defendant's first challenge, concluding that a shareholder's basis was decreased "for any period" by the amount of that shareholder's pro rata share of the corporation's losses, and a shareholder incurred previously unabsorbed losses in the first year the shareholder had adequate basis to do so. In regards to the over-reporting claim, the court held that the Tax Court made no clear error when it upheld the IRS's determination not to reduce the sole proprietorship's income. Consequently, there was no dispute that appellants' 2003 tax return understated their taxes by an amount that qualified as substantial. Accordingly, the court affirmed the judgment. View "Barnes, et al v. Commissioner, IRS" on Justia Law

This appeal stemmed from plaintiffs' suit against the government after the government alleged that plaintiffs failed to file adequate tax returns. The court understood plaintiffs' pro se appeal to contend that the government had waived the limitations defense by failing to raise it in its first dispositive motion. The court expressed no opinion on the government's jurisdictional argument and concluded instead that the government had not forfeited its limitations defense. The court also found plaintiffs' argument that the statute of limitations should have been tolled was without merit. Accordingly, the court affirmed the district court's dismissal of plaintiffs' complaint in its entirety. View "Kim, et al v. United States, et al" on Justia Law

When an employee's name and Social Security number listed on Form W-2 do not match in the SSA's database and this happens to a sufficient number of employees, the SSA sends the employer a "no-match" letter. In 2006, Judicial Watch filed a Freedom of Information Act (FOIA), 5 U.S.C. 552, request with the SSA seeking the names of the 100 U.S. employers that generated the most no-matches from 2001 through 2006. The agency declined to produce such records, concluding that they were exempt under FOIA Exemption 3. The district court agreed with the SSA. The court affirmed the district court's judgment and held that the records sought by Judicial Watch would disclose "return information" and were protected from disclosure by the Tax Code, 26 U.S.C. 6103(a). Moreover, the Haskell Amendment was not applicable here because Judicial Watch sought data that could be associated with a particular taxpayer, the employer. View "Judicial Watch, Inc. v. SSA" on Justia Law

106 Ltd. (Partnership), a limited partnership, appearing through its tax matters partner David Palmlund, appealed a decision of the United States Tax Court upholding the imposition of a forty per cent accuracy-related penalty by the IRS. The IRS determined that the Partnership had utilized a so-called "Son of BOSS" tax shelter to overstate its basis in Partnership interests by approximately $3 million and to thereby reduce Palmlund's individual federal income tax liability by nearly $400,000. The sole issue before the D.C. Circuit was whether the Tax Court erred in determining that the Partnership failed to establish a reasonable cause defense to the accuracy-related penalty pursuant to 26 U.S.C. 6664(c)(1). The D.C. Circuit affirmed, holding that the Tax Court did not err in concluding that the Partnership failed to establish the reasonable cause defense to the forty per cent accuracy-related penalty. View "106 Ltd. v. Comm'r of IRS" on Justia Law

Taxpayer appealed a judgment of the Tax Court rejecting two contentions: first, a constitutional claim that certain employees of the IRS's Office of Appeals were "Officers of the United States," so that their appointments must conform to the Constitution's Appointments Clause, art. II, section 2, cl. 2, and second, an argument that the employees in question abused their discretion in rejecting his proposed compromise of the collection of his tax liability. Because the authority exercised by the Appeals Office employees whose status was challenged here appeared insufficient to rank them even as "inferior Officers," the court rejected the constitutional claims. Furthermore, the court found no abuse of discretion in those employee's decision in this case. View "Tucker v. Commissioner, IRS" on Justia Law