Current Ag Law & Taxation Cases and Rulings

Last updated: November 20, 2009

1. Kosok v. Fitzpatrick, No. 2008AP2351, 2009 Wisc. App. LEXIS 883 (Wisc. Ct. App. Nov. 17, 2009)(plaintiff established statutory elements of adverse possession of disputed strip of land for 20 years; fence remnants were sufficient to "raise a flag of hostility" and were in fact treated as the boundary between the properties - acquiescence present).
2. Dineen v. Rechichi, No. 1267 CA 09-00764, 2009 N.Y. App. Div. LEXIS 8179 (N.Y. Sup. Ct. Nov. 13, 2009)(plaintiff seeks damages for injuries suffered while working on defendant's barn, asserting violations of state labor law and negligence; on appeal of trial court's award of summary judgment for defendant, court affirmed; only question on appeal was whether the defendant entitled to exemption under state labor laws for owners of one- and two-family dwellings, and court determined that exemptions applied; fact that plaintiff hired to build barn before construction of defendants' home immaterial becasue plan for home construction underway).
3. Johnson, et al. v. Koch Foods, Inc., No. 2:07-cv-51, 2009 U.S. Dist. LEXIS 106058 (E.D. Tenn. Nov. 13, 2009)(plaintiffs, workers at defendant's chicken processing facility, bring claim under Fair Labor Standards Act (FLSA) to recover compensation for "donning and doffing" time and time spent sanitizing and washing protective gear; court holds that protective gear at issue in case are "clothes" within the exemption contained in 29 U.S.C. Sec. 203(o) and that donning and doffing them constitutes "changing clothes" - summary judgment granted for defendant on that issue; but, washing protective gear is not within exemption because exemption only applies to time spent washing ones body; however, donning and doffing and washing of protective gear may be integral activities under Portal-to-Portal Act that benefit both parties and summary judgment inappropriate on this issue).
4. Hopkins v. State, No. 03-07-00253-CV, 2009 Tex. App. LEXIS 8780 (Tex. Ct. App. Nov. 13, 2009)(case involves dispute over ownership of strip of land between adjoing land of parties, and plaintiff's inverse condemnation action against defendent for compensation for taking of portion of disputed area for drainage easement; trial court entered "take nothing" judgment and plaintiff appealed; on appeal, plaintiff's claim to ownership under "strip and gore" doctrine failed because deed clearly described the precise boundary with the disputed strip and conveyed grantor's intent not to convey disputed strip; adverse possession elements not present).
5. Priv. Ltr. Rul. 200946020 (Aug. 13, 2009)(cooperative's DPAD limited to one-half of W-2 wages in accordance with Treas. Reg. Sec. 1.199-7 such that expanded affiliate group (EAG) members are treated as a single corporation; facts involved a cooperative with a wholly-owned subsidiary).
6. Priv. Ltr. Rul. 200946021 (Aug. 12, 2009)(payments from a farming cooperative qualify as per-unit retain allocations paid in money with result that cooperative's DPAD should be computed without regard to deductions for payments made to farmers for commodities).
7. Christiansen v. Comr., No. 08-3844 (8th Cir. Nov. 13, 2009)(heir's partial disclaimer valid as to amount that passed to charitable foundation, and estate entitled to charitable deduction; IRS's final determination of estate value not a "preceded event" or contingency that caused the disclaimer to be contingent; allowance of fixed-dollar-amount partial disclaimers not against public policy merely because IRS might be disincentivized to audit estate tax returns).
8. Bellco Credit Union v. United States, No. 08-cv-01071-CMA-KMT (D. Colo. Nov. 12, 2009)(on plaintiff's motion for summary judgment that income from its "extracurricular" activies are not subjecto to unrelated business income tax court ruled that brokerage services income and commissions are tax-exempt when earned from member activitiy, but is subject to UBIT when earned from non-member activity with no deminimis exception; UBIT applicable to 4 percent interest that credit union owned in a partnership consisting of a group of credit unions; case remanded for trial on whether income related to credit life and disability insurance products subject to UBIT).
9. TG Missouri Corp. v. Comr., 133 T.C. No. 13 (2009)(production molds that petitioner purchased and that were later sold to customers are not assets subject to depreciation; thus, petitioner properly included costs of molds in petitioner's cost of supplies in determining amount of research credit).
10. S. 475, The Military Spouses Residency Relief Act, signed into law on Nov. 11, 2009 as Pub. L. No. 111-97 (specifies that when service member leaves home state in accord with military or naval orders that service member's heterosexual spouse may retain residency in home state for voting and tax purposes after relocating from the home state to accompany the service member).
11. Enbridge Energy Co., et al. v. United States, No. 08-20261 (5th Cir. Nov. 10, 2009)(IRS could ignore existence of corporation formed to buy target company's stock which would then sell the stock to the actual buyer of the stock; income on asset sales is ordinary income to and seller and seller on asset sale and subsequent distribution of proceeds from the corporation; no new basis for buyer; penalties applicable; sham transaction arranged by PriceWaterhouse Coopers).
12. Elliott v. Custom Apple Packers, Inc., No. 27398-9-III, 2009 Wash. App. LEXIS 2820 (Wash. Ct. App. Nov. 10, 2009)(plaintiff not entitled to overtime wages because plaintiff's labor in fruit packing facilities was "agricultural labor" exempt from the requirement to pay overtime wages).
13. Byers v. Comr., No. 08-2016 (8th Cir. Nov. 10, 2009), aff'g, T.C. Memo. 2007-331 (petitioner determined to be self-employed truck driver and not employee of trucking company with result that income subject to self-employment tax; petitioner determined which route to take and order of pick-ups; petitioner not paid set wage, but percentage of gross; no accrual of vacation or pension benefits; petitioner never sent a W-2 and didn't object to receiving Form 1099).
14. Ragassa v. Comr., T.C. Summ. Op. 2009-166 (court applied Cohan rule to estimate petitioner's unsubstantiated charitable contributions).
15. IRS Info Ltr. 2009-0131 (Jun. 15, 2009)(taxpayer entitled to first-time homebuyer credit on home purchased from spouse's parents; taxpayer not related party to spouse's parents).
16. IRS Info. Ltr. 2009-0132 (Jun. 15, 2009)(taxpayer cannot qualify for first-time homebuyer credit on purchase of subsequent home if either taxpayer or taxpayer's spouse used mobile home as their principal residence within the three year period ending on the date of purchase of a new principal residence).
17. IRS Info. Ltr. 2009-0135 (Jun. 24, 2009)(divorced taxpayer ordered to vacate home more than three years ago not eligible to claim first-time homebuyer credit on purchase of new home because ownership interest retained in home during three year period before purchase of new home).
18. IRS Info. Ltr. 2009-138 (Jun. 19, 2009)(Iowa's one-time fee for new vehicle registrations is a sales tax (rather than an excise tax) that is deductible under I.R.C. Sec. 164).
19. IRS Info. Ltr. 2009-0155 (Jul. 10, 2009)(taxpayers who obtain benefits and burdens of ownership of new home can claim first-time homebuyer credit even if seller still retains legal title; involved house puchased on contract for deed).
20. IRS Info. Ltr. 2009-0167 (Aug. 24, 2009)(first-time homebuyer credit may be claimed for purchase of duplex, but credit only claimable against portion of purchase price attributable to portion of duplex that taxpayer will use as principal residence).
21. IRS Info. Ltr. 2009-0175 (Sept. 21, 2009)(taxpayer not entitled to first-time homebuyer credit on purchase of home from grandmother; no analysis given as to why not).
22. Lenard, et ux. v. Comr., T.C. Summ. Op. 2009-165 (unreported payments received by insurance agent upon termination of agency agreement are ordinary income and not capital gain; payments subject to self-employment tax because they were based on quality and quantity of agent's prior work; accuracy-related penalty upheld).
23. UTAM Ltd., et al. v. Comr., T.C. Memo. 2009-253 (IRS's notice of final partnership administrative adjustment to a partnership held to be untimely because IRS issued the notice after the three-year statute of limitations expired; basis overstatement did not trigger six-year statute of limitations; opinion follows court's prior holding in Bakersfield Energy Partners and other cases).
24. Priv. Ltr. Rul. 200945005 (Jul. 28, 2009)(petitioner on cash method held to be in receipt of disbursement from deferred compensation plan as of date of actual receipt of check (Jan. 2) and not when he was advised that the check was available to be picked up (Dec. 31 of prior year); office at which checked could be picked up closed on Dec. 31 so petitioner not in constructive receipt of check as of Dec. 31 of prior year).
25. Priv. Ltr. Rul. 200945035 (Sept. 2, 2009)(IRS guidance provided concerning how a liquid qualifies as renewable diesel for purposes of I.R.C. Sec. 40A biodiesel fuel credit; liquid fuel must meet relevant American Society of Testing and Materials standards before liquid is blended with petroleum-based diesel fuel).
26. Priv. Ltr. Rul. 200945020 (Jul. 27, 2009)(owner and lessor of condemned commercial real estate has three years to acquire qualifying like-kind replacement property, starting from the end of the tax year in which the taxpayer took actual or constructive receipt of the proceeds from the condemnation).
27. ECC 200945047 (Sept. 8, 2009)(homosexual's failure to include employee discounts received for a domestic partner constituted "willful blindness" for failure to investigate the law; federal law (Defense of Marriage Act) is unequivocal with respect to its definition of a spouse; underreporting penalties applicable for taking a position on a return that is contrary to substantial authority and without a reasonable basis for such position).
28. Young v. Ledford, No. 2080473, 2009 Ala. Civ. App. LEXIS 554 (Ala. Ct. Civ. App. Nov. 6, 2009)(boundary-line tree is owned by the adjacent owners as tenants in common; thus, no particular adjacent owner can cut or destroy such a tree without the consent of all owners; concurring judge would modify rule to allow an owner to cut such tree without other owner's consent if nuisance present).
29. Bernasek v. Umatilla County Assessor, No. TC-MD 081035C (Ore. Tax Ct. Oct. 30, 2009)(portion of plaintiffs' (married couple) property qualifies for farm use special assessment under state law; however, balance of property not eligible for special assessment because plaintiff did not use property for farming activities). 
30. Neb. Dept. of Rev. (Rev. Rul. 01-09-02 (Oct. 30, 2009)(involves construction of state net metering statute - states sales tax is imposed on the gross amount of electricity sold to a custormer-generator because value of excess purchased by local distribution utility is separate transaction that does not reduce gross receipts of local distribution utility).
31. Ind. Dept. of Rev. (Ltr. of Finding 09-0546 (Oct. 28, 2009)(taxpayer not entitled to exemption from sales and use tax on purchase of ATV; taxpayer failed to prove that ATV was used directly in farm production).
32. Duncan  v.  LaBarge, No. 096027 (8th Cir. Nov. 5, 2009)(no abuse of discretion by bankruptcy court in dismissing debtors' case for failure to file required credit counseling certificate; debtors failed to establish exigent circumstances meriting a waiver of the requirement).
33. Barr, et ux. v. Comr., T.C. Memo. 2009-250 (petitioners, married couple, had ordinary rather than capital gain income from the surrender of life insurance policy; surrender not a sale or exchange of a capital asset; accuracy penalty upheld for failure to report).
34. Bruen, et al. v. Comr., T.C. Memo. 2009-249 (petitioner entitled to equitable innocent spouse relief from one-half of joint income tax liability owed with former spouse becuase petitioner did not have reason to know that former spouse would not pay one-half of tax liability as ordered by family court during divorce proceedings).
35. Iowa Dept. of Rev. Policy Ltr. 09300065 (Oct. 8, 2009)(out-of-state photographer providing services in Iowa must collect and remit use tax on purchase price of a disc mailed to a customer in Iowa because the photographer distributed tangible personal property).
36. Scroggin v. Wyeth, No. 08-2711 (8th Cir. Nov. 2, 2009)(plaintiff's state law claim for failure to warn not preempted by federal law because there was no evidence that FDA would not have permitted the strengthening of the labels of Premarin, Prempro and Provera in a manner consistent with Arkansas law; defendants failed to show that the state requirements obstruct the purposes of federal drug labeling regulation).
37. ECC 200944035 (Aug. 21, 2009)(IRS concedes that an overstatement of basis is not an omission from gross income for purposes of extending the statute of limitations under I.R.C. Sec. 6501(e)(1) and that an item must be fully omitted to be covered by I.R.C. Sec. 6501(e)(2)).
38. ECC 200944049 (Mar. 30, 2009)(taxpayer failed to provide clear and convincing evidence that payments made to executive were reasonable compensation).
39. Priv. Ltr. Rul. 200944002 (Jul. 15, 2009)(grantor's contribution to trust was taxable gift; no ruling made on whether trustee's discretion to distribute income and principal of trust to grantor causes trust's assets to be included in grantor's estate via I.R.C. Sec. 2036).
40. Priv. Ltr. Rul. 200944012 (Jul. 27, 2009)(owner and lessor of condemned commercial real estate has three years to acquire qualifying like-kind replacement property; three-year period begins from the end of the tax year in which owner and lessor took actual or constructive receipt of the proceeds from the condemnation).
41. ILM 200944027 (Jul. 22, 2009)(both NRSA and non-NRSA grant payments (stipends) from university to postdoctoral fellows are subject to FICA tax because they are compensation for services under I.R.C. Sec. 117(c) and because there is an employment relationship between the university and the postdoctoral fellows receiving the payments)
42. Zimmerman, et al. v. Board of County Commissioners, No. 98,487, 2009 Kan. LEXIS 1073 (Kan. Sup. Ct. Oct. 30, 2009)(court upholds defendant's ordinance banning commercial wind farms; defendant properly followed state statutory procedures in adopting ordinance prohibiting wind farm construction and such prohibition was reasonable based on defendant's consideration of aesthetics, ecology, flora and fauna of Flint Hills; court cited numerous adverse effects of commercial wind farms including, damage to local ecology, prairie chicken habitat - including breeding grounds, nesting and feeding areas and flight patterns, and unsightly nature of large wind turbines as well as negative impact on property values, agriculture and nature-based tourism; parties ordered to submit additional briefing and prepare for oral argument on whether defendant's ordinance constituted a "taking" of plaintiffs' property rights without just compensation, and whether the ordinance violates the Commerce Clause by discriminating against interstate commerce).
43. Keene v. Zoning Board of Adjustment, Etc., et al., No. 5D07-3058, 2009 Fla. App. LEXIS 16130 (Fla. Ct. App. Oct. 30, 2009)(horseback riding school and the boarding and stabling of horses on private landowner's property adjacent to plaintiff's property is properly characterized as a commercial-agricultural use that is impermissible under county's development Code; defendant's issuance of special use permit allowing such usage improper).
44. Verma v. Tilley Farms, Inc., No. 1 CA-CV 07-0576, 2009 Ariz. App. LEXIS 748 (Ariz. Ct. App. Oct. 29, 2009)(state statute allowing timeframe for buyer of real estate to rescind purchase contract once seller provides buyer with affidavit concerning certain statutorily required attributes of the land upheld as constitutional and seller compliance with statute is mandatory unless waived by buyer; as applied to buyers in the case who had actual knowledge of a federal flood easement over the property at issue, two buyers allowed their statutory rescission rights to lapse and are bound by the purchase contracts, but third buyer properly invoked rescission right).
45. Riceland Foods, Inc. v. Pearson, et al., 2009 Ark. 520 (2009)(landlord's lien for unpaid rent for farm lease not enforceable against plaintiff who bought grain from tenant without notice that tenant had failed to pay rent; plaintiff was an "innocent purchaser" and no facts present that would have put plaintiff on notice that it was purchasing crops grown on leased land which would have given rise to a duty of plaintiff to inquire about the possibility of a landlord's lien).
46. In re Estate of Humphreys, No. E2009-00114-COA-R3-CV, 2009 Tenn. App. LEXIS 716 (Tenn. Ct. App. Oct. 28, 2009)(farmer died intestate and implied partnership deemed to exist with surviving spouse entitling her to one-half of assets of farm business with balance disbursed to decedent's estate; while Schedule F filed only in decedent's name, Schedule F included incomes of both decedent and surviving spouse).
47. Rhode Island Fisherman's Alliance, et al. v. Rhode Island Department of Environment Management, et al., No. 08-2390 (1st Cir. Oct. 23, 2009)(court uphholds trial court's refusal to remand case and decision to dismiss plaintiff's claim that defendant violated state regulations by retroactively imposing federal restrictions on lobster trapping).
48. Iowa Dept. of Rev. Policy Letter, 09300060 (Aug. 25, 2009)(dyed diesel fuel seller need not pay sales tax on environmental protection charge; separately stated, legally imposed fees are excluded from taxable sales price of tangible personal property).
49. Westfield Insurance Co. v. Hunter, et al., No. CA2009-05-134, 2009 Ohio App. LEXIS 4743 (Ohio Ct. App. Oct. 26, 2009)(insurance policy coverning residence inapplicable to injuries sustained in ATV accident on farm property because accident "arose out of a premises" that was not an "insured location").
50. In re Estate of Hedke, 278 Neb. 727 (2009)(trial court's determination that primary heir of decedent did not unduly influence decedent's will and trust reversed - evidence established that heir improperly influenced decedent in making her will; trial court's order finding deed transfering property to trust valid and that heir had misappropriated decedent's assets while serving as attorney-in-fact vacated - sibling contesting will lacked standing to recover assets for the estate and trial court did not have jurisdiction over claims; sibling did have authority, as trust beneficiary, to challenge primary heir's actions while servign in capacity of trustee; case remanded for further findings and determinations concerning primary heir's transactions during the trust's winding-up period).
51. Iowa Dept. of Rev. Policy Letter, 09300059 (Sept. 16, 2009)(bottled beverage comprised mostly of water and without sweeteners (Evolv) is considered food for human consumption that is exempt from sales tax).
52. Swift & Co., et al. v. Department of Revenue, et al., No. S-09-1095 (Neb. Sup. Ct. Oct. 23, 2009)(cleaning service contracts for the cleaning of meat processing plants and the tangible personal property contained in the plants are subject to sales tax; Defendant's regulation so specifying upheld).
53. Powell, et al. v. Tosh, et al., No. 5:09-CV-000121-TBR, 2009 U.S. Dist. LEXIS 98564 (W.D. Ky. Oct. 22, 2009)(plaintiff class asserts numerous claims against defendant hog producers for nuisance and damages related to nuisance claims; plaintiffs filed suit in state trial court, but defendant sought removal to federal court; plaintiffs' motion to remand denied; Class Action Fairness Act (which vests jurisdiction in such matters in federal district court) applicable and exceptions not applicable).
54. CCA Ltr. Rul. 200943034 (Aug. 25, 2009)(I.R.C. Sec. 170(f)(14) deduction reduced by amount which bears the same ratio as the rehabilitation tax credits allowed for the 5 preceding tax years over the FMV of the building on the date of the contribution).
55. CCA Ltr. Rul. 200943033 (Aug. 24, 2009)(guidance on charitable contributions of facade easements).