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

This case arose when the IRS gave Fred Bame an erroneous tax refund of over $500,000. After Fred died and the government was unable to collect from his estate, the government filed suit against his ex-wife and two corporations she owned to recover the money. On appeal, the ex-wife and the corporate defendants challenged the district court's award based on unjust enrichment to the government. The court concluded that the district court erred in granting summary judgment to the government where there was a genuine issue of material fact as to the ex-wife's good faith defense. Further, there was a genuine issue of material fact as to the ex-wife's entitlement to the money Fred transferred to her. Accordingly, the court reversed and remanded for further proceedings. View "United States v. Bames, et al." on Justia Law

Defendant pleaded guilty to conspiracy to defraud the government by unlawfully evading tax obligations. On appeal, defendant challenged the district court's restitution order. The court concluded that the district court did not err in adopting an IRS agent's restitution calculations; the district court's oral and written findings were sufficiently thorough to support its restitution order; the district court did not clearly err by relying on the agent's testimony that the boating-related expenses were personal expenses that were unlawfully deducted as business expenses; and the court rejected defendant's arguments regarding the restitution payment schedule and defendant's complexity exception argument under 18 U.S.C. 3663A(c)(3)(B). Accordingly, the court affirmed the judgment. View "United States v. Wirth" on Justia Law

Plaintiff, president and owner of WestCorp, sued the government for a refund of an IRS tax penalty that he paid. At issue was the treatment of admittedly incomplete payments WestCorp made from 2000-2001. To maximize its recovery, the IRS applied those payments first toward WestCorp's non-trust fund taxes rather than dividing the payments proportionally between WestCorp's trust fund and non-trust fund taxes. The court agreed with the district court that the undisputed facts show, as a matter of law, that plaintiff willfully failed to pay the trust fund taxes at issue; the court also agreed with the district court that the IRS properly allocated the undesignated payments at issue; and the court rejected plaintiff's contention that the IRS should nonetheless have applied at least part of the undesignated payments toward WestCorp's trust fund obligations. Accordingly, the court affirmed the judgment. View "Westerman v. United States" on Justia Law

Defendant, a manager at the Ford Motor Company, was convicted of four counts of willful income tax evasion in violation of 26 U.S.C. 7201 for failing to report and then concealing kickbacks received from Ford vendors during each of the 2001 through 2004 tax years. The court concluded that there was more than sufficient evidence for a reasonable jury to find beyond a reasonable doubt, with respect to each count, that defendant committed an act of tax evasion within six years of the indictment; the district court did not err in not suppressing defendant's involuntary statements made during an agent's interview; the district court did not abuse its discretion in denying defendant's motion for a Franks v. Delaware hearing; the district court's tax loss findings were not clearly erroneous; in any event, the court need not consider the tax loss findings issues because defendant made no showing that the items in question - individually or in combination - would have lowered his base offense level by reducing the net tax loss; defendant's sentence was reasonable where the district court did not abuse its considerable discretion in fashioning an appropriate sentence; and the court rejected defendant's restitution claims. Accordingly, the court affirmed the judgment. View "United States v. Perry" on Justia Law

Debtors appealed from the order of the bankruptcy court confirming their amended Chapter 13 plan. At issue was whether the bankruptcy court erred when it confirmed debtors' plan that did not provide for payment of unsecured non-priority tax claims and tax preparation fees ahead of other non-priority unsecured creditors. Because a plan proposed by debtors providing for special treatment of the tax claims would unfairly discriminate against other unsecured non-priority creditors, the Bankruptcy Appellate Panel held that the bankruptcy court's confirmation of the plan was proper. View "Copeland, et al v. Fink" on Justia Law

Kindred Hospital appealed the district court's order upholding DHHS' decision that Kindred Hospital should have reduced a state tax expense by the amounts it received from a privately administered pool fund on its Medicare Cost Reports for the years 2000-2003. The court followed the well-reasoned opinion of the district court and affirmed the Administrator's decision. View "Kindred Hospitals East v. Sebelius" on Justia Law

Plaintiff appealed the district court's grant of summary judgment, arguing that the district court erred in ruling that her failure to submit a physician's statement as required by the IRS Revenue Procedure 99-21 was fatal to her claim of financial disability. Because plaintiff failed to submit a physician's statement altogether, the court agreed with the district court that she did not provide the IRS with probative evidence of financial disability, and therefore her claim was properly denied as time-barred by 26 U.S.C. 6511(b)(2)(A). View "Abston v. CIR" on Justia Law

The United States Tax Court assessed income tax deficiencies and penalties against DKD Enterprises, Inc. (DKD) and Debra Dursky for the years 2003 to 2005. The Eighth Circuit Court of Appeals (1) affirmed the tax court's decisions that (i) DKD's cattery operations were not legitimate trade or business expenses under 26 U.S.C. 162(a), (ii) funds spent by DKD to operate the cattery were taxable to Dursky as a constructive dividend, and (iii) funds spent by DKD in payment of Durksy's health insurance plan were not a deductible accident or health plan under 26 U.S.C. 106(a) nor an excludable ordinary and necessary business expense under section 162(a); (2) reversed the tax court's decisions that DKD's contributions to the profit-sharing pension plan for two 2003 and 2004 did not qualify for a 26 U.S.C. 401 and 501 deduction; and (3) remanded for further consideration as to (i) whether DKD's 2006 contribution to the profit-sharing pension plan qualified for the 401 and 501 deduction in tax year 2005, and (ii) whether that distribution was taxable to Dursky as a constructive dividend.

Appellant sought judicial review of the Commissioner's notice of determination sustaining a proposed levy to collect his delinquent income tax liabilities for 1996-2002 and a tax-lien filing for 1998 and 2000-2002 tax liabilities. Appellant also sought review of the Commissioner's denial of collection due process (CDP) hearings to his purported nominees and alter egos. Following trial, the tax court upheld the Commissioner's determinations and appellant appealed. The court agreed with the tax court that appellant was not denied a fair CDP hearing based on the IRS settlement officer's purported reliance on information that was not part of the administrative record in making his determination where the officer provided a complete administrative record to the tax court. Even assuming that the officer did rely on documents outside of the administrative record, the error was harmless. The court also held that the tax court lacked jurisdiction to review letters from an IRS revenue officer to the purported alter egos and nominees because that court's jurisdiction under 26 U.S.C. 6330(d)(1) was limited to reviewing determinations by the IRS Appeals Office.

This case concerned the Federal Insurance Contribution Act (FICA), 26 U.S.C. 3101 et seq., and certain employment taxes FICA imposed upon employers. After a bench trial on the merits, the district rendered a tax deficiency judgment against DEWPC for unpaid FICA taxes and DEWPC appealed. The court held that the district court did not abuse its discretion in admitting the government's expert testimony on the issue of reasonable compensation and, because the district court applied the correct legal standard, its determination on Watson's FICA wages was affirmed. Accordingly, the judgment of the district court was affirmed.