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

Appellee received a notice of deficiency from the IRS and she contested the assessments, asserting the time bar in 26 U.S.C. 6501(a). Claiming an interest in this issue, the government of the United States Virgin Islands (USVI) sought to intervene, either as of right under Civil Rule 24(a)(2), or permissively under Civil Rule 24(b)(2). The tax court denied intervention and the USVI appealed. The court concluded the USVI had standing to intervene where the IRS did not dispute the last two elements of standing, causation and redressability, and where the USVI had presented sufficient evidence of an injury in fact. The court also held that the tax court abused its discretion by using an incorrect legal standard to deny permissive intervention where the tax court erred by ignoring the principal consideration of whether the USVI's intervention would cause undue delay or prejudice. Accordingly, the judgment of the tax court was reversed.

This case arose out of a dispute between Union Pacific, the owner of mineral rights to three parcels of land, and Linn Farms, the surface rights owner to the parcels who purchased the mineral rights from the Arkansas Commissioner of State Lands. Union Pacific was unaware of the forfeiture of the mineral rights due to tax delinquency and leased the mineral rights to Chesapeake Exploration, who then recorded the lease. Discovering the lease, Linn Farms sued to quiet title to the mineral rights. The district court denied Linn Farms' motions for summary judgment and granted summary judgment to Union Pacific and Chesapeake Exploration, concluding that the sale of the mineral rights by the state was invalid because the Commissioner failed to provide adequate notice of the impending forfeiture in violation of Union Pacific's due process rights. The court affirmed and held that the notice provided by the Commissioner was inadequate under the circumstances of the case even though it complied with Arkansas law. Accordingly, the court affirmed the district court's judgment.

Midwest sued the Department, seeking a declaration that South Dakota had a taxation scheme that violated a provision of the federal Railroad Revitalization and Regulatory Reform Act (4-R Act), 49 U.S.C. 11501(b)(4). The complaint alleged in part that the 4-R Act's bar on discriminatory taxes against rail carriers extended to Midwest. The district court denied Midwest's motion for summary judgment and granted the Department's, concluding that court precedent did not support extending the protections of the 4-R Act to Midwest. The court held that, in light of Midwest's bare assertions that South Dakota's tax had the effect of discriminating against rail carriers, the district court did not err in ruling as it did. Any ruling to the contrary would have required the district court to rely upon speculation with respect to whether South Dakota's taxes on railcar repair services performed by a privately owned, third-party service provider and any tangible personal property used therein impermissibly resulted in discriminatory treatment of a rail carrier. Accordingly, the judgment was affirmed.

Defendants, Brian Keith Ellefson and Mark Edward Ellefsen, were convicted of conspiracy to defraud the United States by obstructing the IRS in the assessment and collection of federal taxes. Brian was also convicted of three counts of filing false income tax returns while Mark was convicted of three counts of aiding and assisting the preparation of false income tax returns. Defendants appealed their convictions and challenged the restitution order. The court held that because the undisclosed information at issue was not material, there was no Brady violation. The court also held that, although the defense should have been allowed to cross-examine a certain government witness regarding a tax-loss calculation and whether she considered Brian's additional payments, any error in denying the cross-examination was harmless beyond a reasonable doubt. The court further held that the district court did not abuse its discretion in excluding defendants' proposed expert testimony under Federal Rule of Evidence 403. The district court also did not err in denying the motion for judgment of acquittal and did not abuse its discretion in denying the motion for a new trial where the record was replete with evidence to support the jury's finding that defendants acted willfully. The court finally held that there was no clear error in the district court's judgment of restitution where the government met its burden of proof and deducted Brian's additional payments from the amount of restitution owed to the IRS. Accordingly, the convictions and restitution orders were affirmed.

Defendant was convicted of filing a false joint income tax return with his wife for calendar year 2007 and sentenced to twenty-four months in prison. On appeal, defendant argued that there was insufficient evidence of willful false reporting, admission of unfairly prejudicial evidence of gambling expenses, and a substantively unreasonable sentence. The court held that the government's evidence was sufficient to permit a rational trier of fact to find the essential elements of the offense beyond a reasonable doubt. The court also held that defendant's casino activities were clear evidence that he personally spent a substantial amount of his business's reported income on expenditures that were not reportable as the business's costs of goods sold and that the evidence was unlikely to unfairly prejudice him. The court further held that the district court did not abuse its substantial sentencing discretion in imposing a presumptively reasonable sentence that was within the advisory guidelines range. Accordingly, the judgment of the district court was affirmed.

Defendant was convicted of ten counts of submitting false claims against the United States and one count of conspiracy to defraud the United States with respect to claims. Defendant appealed his conviction and sentence. The court held that there was sufficient evidence to show that defendant filed each of the ten tax returns at issue and committed the charged offenses. The court also held that the district court did not procedurally err in sentencing defendant based on the amount of loss caused by defendant's offenses and based on the number of victims of his offenses.

The United States brought this civil action under 26 U.S.C. 7408 to enjoin defendant from promoting several fraudulent tax schemes. After a court trial, the district court permanently enjoined defendant from promoting his schemes, ordered him to advise the IRS of any tax arrangements or business entities formed at his discretion, and required him to provide a copy of its order to his clients. On appeal, defendant argued that the injunction was not supported by adequate factual findings and legal conclusions, and that it was overbroad, an impermissible delegation of Article III power, and an unconstitutional prior restraint. The court rejected defendant's hypertechnical criticisms of the district court's order where section 6700 was a linguistically complex and intricate statute and where the district court need not include the entire statutory language in each of its findings and conclusions. Therefore, the court held that the district court's exhaustive order more than satisfied each of the requirements in section 6700 and affirmed the judgment of the district court.

The Fond du Lac Band of Lake Superior Chippewa (Band) sued the the Commissioner of the Minnesota Department of Revenue (Commissioner) to prevent taxation of the out-of-state pension income of Band members. The state taxed a Band member's pension earned in Ohio but received on a reservation. The Band argued that the taxation violated due process and was preempted by federal law. The court held that because citizenship provided a constitutional nexus, Minnesota's taxation complied with due process. The court also held that Minnesota's taxation was not preempted where the case was controlled by the general rule: "Absent express federal law to the contrary, Indians going beyond reservation boundaries have generally been held subject to non-discriminatory state law otherwise applicable to all citizens of the state." Accordingly, the judgment of the district court was affirmed.

Defendant was convicted of four counts of tax evasion and sentenced to 18 months imprisonment. Defendant appealed his convictions, arguing that the government constructively amended the indictment through the evidence presented at trial; the instructions erroneously defined "taxable income" and "good faith"; and the evidence was insufficient to support his convictions. The government appealed defendant's sentence, contending that the district court erroneously relied on a fact rejected by the jury in imposing a sentence below the applicable Sentencing Guidelines range. The court held that neither a constructive amendment nor a variance occurred; the jury was properly instructed and defendant's arguments to the contrary were rejected; and there was sufficient evidence for the jury to convict defendant. The court also held that the district court did not commit a procedural error and that the sentence was substantively reasonable. Accordingly, the judgment of the district court was affirmed.

A jury found defendant, a licensed attorney, responsible for trust fund recovery penalties imposed by the IRS pursuant to 26 U.S.C. (I.R.C.) 6672 for unpaid employment taxes owed by Iowa Trade Bindery, Inc. (ITB). Defendant appealed the district court's judgment and "all adverse rulings and orders in this case." The court held that the district court did not abuse its discretion in admitting defendant's signed Form 2751 and an IRS officer's testimony about the form, or by instructing the jury with respect to the form and its effect. The court also held that the district court did not err in denying defendant's motion for judgment as a matter of law where the jury's verdict was supported by substantial evidence. The court concluded that defendant's remaining claims were without merit. Accordingly, the court affirmed the judgment of the district court.