Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Minneapolis imposes an annual vacant building registration fee on owners of vacant buildings “to recover all costs incurred by the city for monitoring and regulating vacant buildings, including nuisance abatement, enforcement and administrative costs.” If unpaid, the city can levy and collect the fee as a special assessment against the property. DRB owns a vacant building in Minneapolis and for several years failed to pay that registration fee. In 2011, DRB received notice the city intended to assess $6,550 for DRB’s unpaid 2010 fee. After a hearing attended by DRB, an administrative hearing officer levied the fee. This process repeated in 2012 and a fee of $6,746 was levied. DRB did not appeal either assessment, but brought a separate suit, on behalf of itself and similarly situated landowners. A magistrate judge recommended judgment in favor of the city, concluding the city had provided DRB with proper notice of the assessments and DRB did not bring its challenges to the assessments within the statutory 30-day appeal period. The Eighth Circuit affirmed the district court’s adoption of the recommendation. View "DRB #24, LLC v. City of Minneapolis" on Justia Law

Appellants appealed the Commissioner's determination that the USDA's Conservation Program (CRP) payments that appellants received were taxable as income from self-employment. The court entered judgment in favor of appellants, holding that the 2006 and 2007 CRP payments at issue were consideration paid by the government for use and occupancy of appellants' property. Consequently, they constituted rentals from real estate fully within the meaning of 26 U.S.C. 1402(a)(1). The court reversed and remanded.View "Morehouse v. Commissioner of IRS" on Justia Law

Taxpayers petitioned the Tax Court, challenging the Commission's notices of deficiency regarding their farmhouse. The Tax Court denied the petition, disallowing $42,694 in claimed deductions because taxpayers failed to prove that the farmhouse expenses were tied to a real estate property rental business for purposes of 26 U.S.C. 162, or related to property held for the production of income within the meaning of IRC 212. The court affirmed the judgment of the Tax Court.View "Meinhardt v. CIR" on Justia Law

Swift County filed suit against Fannie Mae, Freddie Mac, and FHFA, alleging that the federal agencies violated state law by failing to pay taxes on the transfers of deeds to real property. The court affirmed the district court's grant of the federal agencies' motion to dismiss because the Exemption Statutes, 12 U.S.C. 1723a(c)(2) and 12 U.S.C. 1452(e), established an exemption from all state taxation. The court concluded that the Exemption Statutes are a valid exercise of Congress's power under the Commerce Clause and the federal agencies are federal instrumentalities, not privately-held corporations. View "Vadnais, et al. v. Federal National Mortgage, et al." on Justia Law

Appellant, a software engineer, filed no federal individual income tax return for 2007. The Commissioner issued a notice of deficiency alleging unpaid taxes, penalties, and interest of more than $250,000 based on a substitute return prepared by the IRS. On appeal, appellant challenged the Tax Court's IRA rollover and business bad debt rulings. The court concluded that appellant's April 30, 2007 contribution was a qualifying partial rollover contribution under I.R.C. 408(d)(3)(D) and appellant was entitled to reduce his taxable IRA distributions by $120,000. Accordingly, the court reversed the Tax Court's decision as to this issue. The court concluded that the Tax Court did not clearly err in finding that appellant failed to prove that his dominant motivation for making the four loans in question made them deductible bad debts when they became worthless in December 2007. The court remanded for a redetermination of the deficiency. View "Haury v. CIR" on Justia Law

Appellants, two couples, challenged the Tax Court's decisions disallowing their claims of dependency exemption deductions and child tax credits for a child of each husband's prior marriage. For each couple, the only tax year at issue, a year in which the ex-wife, the custodial parent, failed to sign a document stating that she "will not claim such child as a dependent" that year, even though she had agreed to provide that document if her ex-husband paid all required child support. The court reviewed the Tax Court's interpretation of the governing statute de novo and concluded that its decisions were consistent with the plain language of 26 U.S.C. 152(e)(2). Accordingly, the court affirmed the judgment of the district court. View "Armstrong, et al. v. C.I.R." on Justia Law

The County filed a putative class action on behalf of similarly situated Minnesota counties seeking a declaratory judgment that Fannie Mae, Freddie Mac, and the FHFA violated state laws by failing to pay a tax on transfers of deeds to real property. The district court granted the federal agencies' motion to dismiss for failure to state a claim. Since Congress exempted the federal agencies from all state taxation except on real property, and Minnesota's deed transfer fell within the broad exemption, the court affirmed the judgment of the district court. View "Hennepin County v. Federal National Mortgage, et al." on Justia Law

Debtor appealed the bankruptcy court's order sustaining the trustee's objection to debtor's claimed exemption. Debtor had filed a petition for relief under Chapter 13 of the Bankruptcy Code and had claimed exempt, as a public assistance benefit under MO.REV.STAT. 513.430.1(10)(a), the portion of her 2012 federal income tax refund that was attributable to a child tax credit allowed under 26 U.S.C. 24. The court affirmed the bankruptcy court's order sustaining the trustee's objection to debtor's claimed exemption, concluding that the refundable portion of the child tax credit was not a public assistance benefit within the meaning of the statute and could not be claimed exempt under the statute. View "Hardy v. Fink" on Justia Law

Appellant formed RJT Investments X, LLC and began acting as RJT's tax matters partner. Thompson, later that year, entered into an illegal "Son-of-BOSS" tax shelter transaction using RJT in order to offset capital gains of approximately $21.5 million. On appeal, appellant and his wife challenged the Tax Court's order dismissing their petition challenging a notice of deficiency issued by the IRS. The court agreed with its sister circuits that outside basis was an affected item that must be determined at the partner level. Because the Tax Court did not determine appellant's outside basis in RJT, the IRS properly issued a notice of deficiency under I.R.S. Code 6230(a)(2)(A)(i). Accordingly, the Tax Court had jurisdiction over appellants' petition challenging the notice. View "Thompson, et al. v. CIR" on Justia Law

WFC challenged the district court's holding that WFC was not entitled to a tax refund for a capital loss it claimed as a result of a complex transaction involving the transfer of leases and the sale of stock. WFC argued that the district court erred in finding that the lease restructuring transaction (LRT)/stock transfer constituted a sham transaction. The court concluded that the district court did not err in finding that the LRT/stock transaction lacked objective economic substance; in finding that WFC failed to meet its burden of proving by a preponderance of the evidence that avoiding the Office of the Comptroller of the Currency (OCC) regulations was its business purpose for the LRT/stock transfer; and in finding that WFC failed to prove by a preponderance of the evidence that the LRT/stock transfer was motivated by a purpose to strengthen its hand with good bank customers or to create management efficiencies. Accordingly, the court affirmed the judgment of the district court. View "WFC Holdings Corp. v. United States" on Justia Law