Annotations 09/2013

(Tax Court has no jurisdiction to review determination of IRS of employment status of petitioner's workers; IRS determined that petitioner's worker was employee and not independent contractor via Form SS-8; Tax Court only has jurisdiction to review employment status determinations only if determination arises in connection with IRS audit and exam). 


(petitioner was a Jazz musician and music professor that claimed deductions for performance-related activities; deductions partially claimed on Schedule A and partially on Schedule C; certain expenses not deductible due to lack of substantiation, but others deductible on Schedule A as related to skill as professor and not reimbursable expenses by employer; accuracy-related penalties upheld with respect to unsubstantiated deductions claimed).


(issue was whether petitioner, custom homebuilder, subject to I.R.C. Sec. 263A (which requires producers and retailers with gross receipts in excess of $10 million to capitalize tax depreciation exceeding financial statement depreciation, indirect labor and overhead costs attributable to production activities as part of cost of inventory or constructed property); petitioner claimed its activities were marketing and sales, rather than production-related due to custom nature of home built and work involved in building homes is subcontracted out and only has employees that perform services; court noted that creative design of custom homes merely ancillary to actual physical work on land and is the equivalent to digging foundation or completing structure's frame; capitalization required of specific costs attributable to production activities including part of owner's salary, employee bonuses, design costs, salaries for office employees, employee benefits, payroll taxes insurance and office expenses).


(the plaintiff leased his horse to a trainer; horse insured under policy requiring plaintiff to state that horse not treated for illness or injury during prior 24-month period, and plaintiff required to report to carrier  any injury or illness after policy took effect; horse turned up lame and leg treated with ice until further evaluation; insurance company notified 15 days after lameness discovered and horse ultimately euthanized;  insurance company denied coverage and plaintiff sued; court determined that plaintiff).


(petitioner gifted cash and marketable securities to her three daughters on the condition (pursuant to written net gift agreement) that the daughters pay any related gift tax and pay any related estate tax on gifted property if petitioner died within three years of gifts; petitioner deducted value of daughters' agreement to be liable for gift or estate tax from value of gifts and IRS claimed gift tax understated by almost $2 million; each daughter and petitioner represented by separate counsel and appraisal undertaken who used mortality tables to compute petitioner's life expectancy which impacted values as reported on Form 709; IRS primary argument was that daughters' assumption of potential estate tax liability under I.R.C. Sec. 2035(b) did not increase petitioner's estate and, as such, did not amount to consideration in money or money's worth as defined by I.R.C. Sec. 2512(b) in exchange for gifted property; court determined that primary question was whether petitioner received any determinable amount in money or money's worth when daughters agreed to pay tax liability; court held the petitioner did receive determinable value as to the gift tax; likewise, assumption of potential estate tax liability may have sufficient value to reduce petitioner's gift tax liability; immaterial that intrafamily deal at issue because all persons represented by separate counsel; issue of fact remains for trial on assumption of estate tax issue). 


(decedent's estate satisfied requirements of I.R.C. Sec. 6166 and made election to pay estate tax in installments; estate failed to pay interest for 2010 and 2011 on deferred amounts of estate tax and IRS issued final notice and demand for payment; court determined that requirements of I.R.C. Sec. 6166(g)(3)(A) satisfied and election to pay estate tax via I.R.C. Sec. 6166 terminated as matter of law; unpaid portion of estate tax due on notice and demand). Annotation


(married couple liable for self-employment tax on distributions from LLC treated taxwise as partnership; earning from partnership self-employment income to general partners).


(eleven years before applying for Medicaid benefits, decedent and spouse created revocable trust and transferred marital home to trust; upon entering nursing home and applying for Medicaid, decedent removed home from trust and took title to home in her own name; the next day, decedent transferred house to her husband; defendant classified transfer as improper and assessed penalty; after decedent died, estate sued; trial court ruled for state; appellate court affirmed on basis that home was removed from available resources of institutionalized spouse and gave husband (community spouse) larger resource allowance; trust could have stayed in decedent's name after removal from trust without triggering penalty). 


(plaintiff sustained injuries during horseback ride on guided trail ride at defendant's ranch when horse plaintiff was riding brushed up against tree injuring plaintiff's leg and hip; trial court denied defendant's motion for summary judgment on basis that defendant's evidence raised question of fact concerning whether they knew of horse's propensity to walk too closely to trees; appellate court affirmed trial court's denial of summary judgment to defendant; riding lesson also ancillary to recreational activity of horseback riding and, as such, release of liability void as against public policy; defendant failed to establish that plaintiff assumed risk of horseback riding as a matter of law because question of fact raised as to whether defendant unreasonably increased risks of horseback riding by using bitless bridle on horse; plaintiff novice rider). 


(petitioner divorced spouse and separation agreement provided for joint custody, said nothing about allocation of tax deductions, and listed ex-spouse as custodial parent; petitioner claimed HOH filing status, dependency exemption deduction, child tax credit, and earned income tax credit on account of petitioner's two minor children;  IRS denied deductions, credits and HOH filing status; court disagreed with IRS, noting that I.R.C. Sec. 152(e) lists circumstances where noncustodial parent can claim child and, under statute, the issue is which parent had custody of child for the greater portion of tax year; "custodial parent" defined as parent with whom child resides for greater number of nights during calendar year; petitioner proved that her two minor children resided with her more than 1/2 of each of the years in question; petitioner provided more than 1/2 of support for one child in each of the two years in issue, and more than 1/2 of support for other child for one year; one child proper age for both years and other child proper age for one year).


(case involves dispute over split-estate property rights of surface owner (federal government) and mineral rights owned by private parties with respect to property in Allegheny National Forest; federal government acquired surface estates via 1911 legislation and beginning in 1980 government and private parties used cooperative process in managing and use of surface for oil and gas drilling under which private owners would give notice to government of planned drilling and government would formally acknowledge receipt of notice; environmental activist groups sued claiming that notice acknowledgement was "major federal action" under NEPA which triggered environmental analysis via NEPA (an environmental impact statement (EIS); settlement agreement entered into in 2009 where federal government agreed to conduct such analysis before issuing acknowledgment of notice; plaintiff sued, claimed that defacto ban on drilling exceeded government's authority because NEPA EIS not required as matter of law; trial court granted plaintiff's motion for preliminary injunction; appellate court affirmed; returning to trial court action, plaintiff then moved for summary judgment, final declaratory judgment and permanent injunction and vacation of preliminary injunction; trial court granted plaintiff's motion in part, but denied request for permanent injunction; settlement agreement vacated and final declaratory judgment entered on merits; environmental activist groups appealed; court's prior ruling that 1911 Act provides that reserved mineral rights are subject only to regulations in the instrument of conveyance not clearly erroneous; case affirmed). 


(state (SD) Cooperative Extension Service barred 4-H member from showing livestock at 4-H exhibitions due to “misrepresentation of the ownership” of winning entry at state fair; member’s father brought Bivens action against state 4-H Association and two state 4-H officials; trial court dismissed state 4-H Association as defendant because it is part of South Dakota State Univ. and controlled by state Board of Regents and 4-H officials due to sovereign immunity; trial court granted preliminary injunctive relief due to state officials not allowing appeal of decision denying livestock showing and alleged violation of due process rights; defendants appealed, moving for stay of injunction pending appeal and trial court denied stay and defendants pursued appeal of preliminary injunction; on appeal, court affirmed issuance of preliminary injunctive relief to plaintiff; plaintiff likely to succeed on merits of due process claim – state took action that damaged plaintiff’s reputation, a protected interest; court determined that participation in 4-H is a “right or status” open to all SD children subject to reasonable, non-discriminatory terms and plaintiff entitled to fair chance to prove that defendants published defamatory ruling depriving plaintiff of right or status conferred by state law carrying due process protections; plaintiff established irreparable harm and equities weigh in plaintiff’s favor). 


(plaintiff challenged defendant's (USDA) approval of National Pork Board's purchase of marketing slogan, "Pork, The Other White Meat" on grounds that National Pork Producers Council (NPPC) sold marketing slogan to National Pork Board and unlawfully used the sale proceeds of $60 million to lobby against animal welfare efforts; specifically, plaintiff claimed that sale violated 5 U.S.C. Sec. 706 and that sale contract resulted in pork checkoff dollars being used to influence government policy and influencing legislation; individual plaintiff hog farmer alleged existence of standing on basis that purchase reduced plaintiff's return on checkoff dollars; court determined that plaintiffs lacked standing to challenge how National Pork Board spent funds collected from hog producers; individual hog farmer's claim merely hypothetical and no plaintiff had any injury that could be redressed by lawsuit because lobbying is what such organizations such as NPPC and Board do). 


(plaintiff, defendant’s farm employee, lost leg when filling storage bin with soybeans; defendant had cut hole in auger hopper to assist with auger’s repair; hole covered with soybeans and not visible to plaintiff who knew of hole and stepped into hole during filling process; plaintiff sued for negligence and trial court granted summary judgment for defendant because hole open and obvious; appellate court reversed on basis that evidence sufficient that plaintiff, while know of hole, couldn’t see it). 


(Chapter 7 case in which debtor seeks to hold bank (serving as trustee of family trust of which debtor is a beneficiary) in contempt for alleged violation of discharge injunction by offsetting 2010 trust distribution to debtor in order to satisfy debtor's obligation to trust for interest on a Nov. 7, 1985 note that debtor had failed to make payments on which hampered trustee's ability to make distributions to other beneficiaries; court holds that discharge injunction applies to note, but that the Doctrine of Recoupment applies to except note from discharge; offset authorized under trust law and state (KS) law; debtor's motion for summary judgment for contempt denied; summary judgment granted for other trust beneficiaries; on appeal, court affirmed). 


(debtor borrowed money from lender and pledged dairy cattle as collateral; lender secured interest in cattle; debtor borrowed additional money from lender pledging crops, farm products and livestock as collateral with security interest containing dragnet clause; lender secured interest; debtor later entered into "Dairy Cow Lease" with third party to allow for expansion of herd; lessor perfected its interest in the leased cattle; debtor filed bankruptcy and court determined that lease arrangement actually created a security interest rather than a true lease - lease not terminable by debtor and lease for longer than economic life of dairy cows, lessor never provided any credible evidence of ownership of cows, parties did not strictly adhere to lease terms; lender filed first and has priority to proceeds from dairy cows; lender's prior perfected security interest attaches to all cows on debtor's farm and to all milk produced post-petition and milk proceeds under 11 U.S.C. Sec. 552(b); in current action, different creditor failed to comply with court’s order requiring posting of bond as condition to stay effect of court’s prior ruling, there was no stay in effect during pendency of appeal and lender (bank) entitled to have proceeds turned over to it; feed supplier creditor did not have standing to seek surcharge of bank’s collateral under 11 U.S.C. Sec. 506(c); trustee did not file motion for surcharge and court could not order amount supplier paid for feed deliveries be retained from funds turned over to bank; bank’s motion for abandonment and turnover of proceeds granted).


(case involves plaintiff’s motion for clarification of summary judgment order and reconsideration of prior finding that defendant did not infringe plaintiff’s patent; plaintiff argued that peanuts are sexually reproduced via seed and infringement can be proven by sexual multiplication alone under Sec. 2541 of PVPA; defendants argued that no infringement occurred because defendants did not sexually multiply or propagate Florida-07 variety or such multiplication or propagation was authorized; prior order of court focused exclusively on infringement by propagation by tubers and determined that there was no evidence that defendant propagated seed via use of tubers or portions of tubers; court now agrees that infringement under Sec. 2541(a)(3) of PVPA can be proven via sexual multiplication of Florida-07 crop, and plaintiff argued that defendants’ contracting with farmers to grow subject peanuts and receiving crop from farmers constituted sexual multiplication based on Asgrow Seed Co. v. Winterboer, 513 U.S. 179 (1995); court disagreed, noting that defendants did not plant and harvest seeds themselves, but contracted the process of sexually multiplying the seeds and such conduct not a “step in marketing” as required for patent infringement; defendants did not sell or intend to sell seeds; motion for clarification denied; defendants also did not propagate new crop in violation of Sec. 2541(a)(5) of PVPA).


(plaintiffs (political subdivisions, farmers and other water users), challenge defendants’ (State DNR and other public officials) plan to pump groundwater presently used for crop irrigation to surface water streams to remedy alleged overuse of state’s allocation of water under Interstate Compact and deliver more water to Kansas; injunctive and declaratory relief sought; court held that plaintiffs failed to show unequivocal waiver of U.S.’ sovereign immunity and that matter comprehensive adjudication of all water rights in Republican River basin in Nebraska so as to confer jurisdiction under 43 U.S.C. Sec. 666a; complaint does not assert quiet title claim; complaint does not state cognizable claim against Federal Defendants; no jurisdiction over state defendants; case dismissed). 


(taxpayer, an LLC, seeks to form an entity that will be treated as a publicly traded partnership pursuant to I.R.C. Sec. 7704(b) (i.e., corporation tax treatment where the income from activities with respect to minerals or natural resources is treated as passive); entity will earn income by providing essential fluid, solids and other oil field waste handling, treatment and disposal services necessary in the fracking process for oil and natural gas extraction; such services to be provided through affiliated limited partnerships, LLCs or disregarded entities; IRS determined that entity's income from services provided would be qualifying income under I.R.C. Sec. 7704(d)(1)(E) as would associated income from marketing and distribution of salvaged hydrocarbons (but not income earned from marketing minerals and natural resources to end users at retail level).


(in the original Tax Court opinion, petitioners, married couple, not entitled to deduction for donated facade easement on petitioners' home; "qualified appraisal" not obtained; issues of material fact remained with respect to donation of home's unused development rights and whether such donation was perpetual in nature; on reconsideration, Tax Court noted that court's original opinion based on Tax Court's prior opinion in Scheidelman v. Comr., T.C. Memo. 2010-151, but that case was vacated by U.S. Court of Appeals for the 2d Cir. in Scheidelman v. Comr., 682 F.3d 189 (2d Cir. 2012); consequently, court held that petitioner's appraisal "qualified" under I.R.C. Treas. Reg. Sec. 1.170A-13(c)(3)(ii)(K) because regulation only imposes reporting requirement which appraisal satisfied (because appraisal explained valuation method and basis for development rights valuation) IRS appraiser not qualified appraiser; partial summary judgment for petitioners granted).


(plaintiff owned horse farm and fired employee who filed for unemployment benefits; defendant initiated compliance audit due to unpaid unemployment insurance taxes; at administrative hearing, defendant determined that employee not “agricultural employee” such that plaintiff had to pay unemployment taxes; all employees considered non-agricultural due to plaintiff’s failure to maintain adequate books and records distinguishing between ag and non-ag employment activities at farm; on appeal court affirmed). 


(decedent died intestate with IRA having no designated beneficiary and three intestate heirs; estate administrator sought ruling that division of IRA into separate IRAs for each intestate heir via trustee-to-trustee transfer would not be a "transfer" that would trigger IRD for the estate by virtue of I.R.C. Sec. 691(a)(2); IRS determined that probate estate not "designated beneficiary" under I.R.C. Sec. 401(a)(9)(B); consequently, IRAs distributable over five years and not over lifetime of each respective heir).


(decedent's revocable trust funded a marital trust and credit shelter trust via fractional formula clause with no asset allocated to marital trust; Form 706, by error, included property funding credit shelter trust on Schedule M for which QTIP election made; later, different legal counsel discovered error and requested ruling on matter; IRS noted that Rev. Proc. 2001-38 treats as void any QTIP election to extent not necessary to reduce estate tax liability to zero; QTIP election, therefore, disregarded and assets of credit shelter trust not included in estate of surviving spouse; surviving spouse also not treated as transferor of assets in credit shelter trust for GSST purposes). 


(on a bipartisan vote of 230-189, the U.S. House passed legislation to continue funding federal government operations through Dec. 15, 2013; bill also defunds Obamacare which contains many tax provisions)


(petitioner, Hollywood actress, claimed deductions for clothing, makeup and other related items as business expenses; IRS denied deductions for lack of substantiation that tied such expenditures to items that would not be suitable for everyday wear; smallness of deduction immaterial; court upheld IRS position).


(petitioner sold S corporation stock to ESOP and remained involved in S corporation business after sale, and paid for non-business expenses from corporate account which were recorded in ledger account; corporation, on behalf of petitioner, made significant charitable contributions and IRS denied deductibility because petitioner fully paid ledger account balances with personal funds and was the party that bore economic burden of such contributions; in latter half of year in which contributions made, petitioner used corporate funds to pay off ledger account balances previously incurred; court determined that S corporation actually bore economic burden of contributions; but, court determined that petitioners did not prove the portion of contributions made in latter half of tax year made with personal funds and did not establish with sufficient evidence that ledger account balances were bona fide debt of petitioner; as a result, associated deductions denied).


(supplier sold USDA-approved food ingredients to poultry company, which used the ingredients to process poultry products before shipping them to its corporate affiliate for sale to the public; case involves lawsuit over poultry company's receipt of shipment mistakenly containing non-approved food ingredient, which poultry company inadvertently used to process thousands of pounds of poultry; USDA ultimately required affiliate to destroy misbranded product, and affiliate sued supplier for breach of contract and breach of warranty as a third-party beneficiary; supplier filed third-party complaint for breach of contract and contribution against poultry company, and poultry company responded with six counterclaims, five of which sought declaratory judgments that the supplier had breached its contract and warranties and that it was required to indemnify poultry company for any losses; in dismissing the five counterclaims, court found that they were not ripe for adjudication because poultry company’s potential damages were “speculative and contingent,” as opposed to “certainly impending” since it was possible that poultry company would owe nothing to the affiliate; finding not overcome by fact that poultry company had voluntarily agreed to pay its affiliate the amount of any damages not recovered from the supplier).


(plaintiffs’ horse leased for breeding but could enter horse competitions if health permitted; terms of lease did not provide for lease payments, but for defendant to pay all horse-related expenses; horse bred to of defendant’s mares and later entered horse competitions which increased value of any future breedings; plaintiff funded some competition costs and defendant claimed existence of oral agreement to continued competition funding and that defendant could keep horse; at time plaintiff sued for return of horse, defendant had obtained frozen semen from horse with low viability rate; trial court granted replevin action for plaintiff and ruled that lease, by its terms, had expired; on appeal, court held that defendant failed to prove unjust enrichment claim – low viability of semen and defendant had received two offspring at no charge).


(petitioners, mother and daughter operated horse breeding partnership and incurred losses; IRS denied deductibility of losses under hobby loss rules; court agreed with IRS on basis that activity not engaged in with requisite profit intent based on nine-factor analysis of which none supported petitioners).


(in split decision, court reversed trial court’s decision and upheld California’s low carbon fuel standard (LCFS) as constitutional (lower court had found violation of interstate commerce clause); LCFS caps average carbon intensity of transportation fuels in CA market and fuel blenders required to meet either specified annual carbon intensity in fuels or use credits to comply with standard if intensity too high; for fuels less carbon intensive than mandated, credits available to sell to companies that need to comply with mandated standard (cap and trade system); CA used “life cycle analysis” that takes into account all carbon emissions generated in the production and refining of fuel and transportation of such fuel to market, and such analysis challenged as facially discriminating against out-of-state producers; court disagreed on basis that carbon intensity measurement based on scientific data and state not imposing its regulations on other jurisdictions; case remanded on question of whether CA fuel standard discriminated in purpose or effect).


(petitioner paid for work done on behalf of partnership and received K-1showing $175,000 as guaranteed payment; petitioner claimed that amount was loan and that he wasn't partner during tax year because not signatory to partnership's amended and revised operating agreement; court determined partnership existence based on all of the facts and valid business purpose; court determined that facts showed partnership existence and that petitioner partner in partnership during tax year in issue and payment was guaranteed payment; court specifically noted that while partnership was a "small partnership" that meant that court had jurisdiction to determine partnership existence and petitioner's status as partner because partnership not subject to TEFRA; as such, court reiterated that "small partnership exception" has no bearing on whether partnership was a partnership or not for purposes other than TEFRA penalties).


(ranch owner filed a breach of contract action against custom seeder, alleging that the custom seeder’s poor performance was the cause of failed barley crop; custom seeder filed a third-party action against seed supplier, arguing failure to instruct; the third-party complaint was settled, and the trial court found that the custom seeder did not breach its contract with the ranch owner; in affirming, the Montana Supreme Court found the trial court did not err by ruling that the custom seeder did not breach the contract by failing to object to the rocky field conditions; field preparation was the responsibility of the ranch owner and the seed supplier; the trial court also did not err in finding that having seed on the ground and inconsistent placement were foreseeable consequences of the field conditions and not indicative of a legally-deficient performance; trial court had not accepted an impossibility defense; custom seeder performed, and its performance was acceptable within the contract terms under the circumstances).


(decedent died, leaving a multi-billion dollar estate; the will provided for a specific bequest of annuity payments under two grantor-retained annuity trusts (GRAT) to a foundation; the  residue of decedent’s estate was to be distributed to a pour-over trust, which was to be distributed to a QTIP family trust and to various family members; the spouse was the trustee of the family trust and a beneficiary of specifically bequeathed assets (SBA) pursuant to the terms of the family trust; the will and the trusts provided that transfer taxes were to be paid from property of the pour-over trust, other than the SBAs; overruling the spouse’s objections, the probate court ruled that if the assets in the pour-over trust, not including the SBAs, were insufficient to pay the transfer taxes, those taxes were to be paid from the SBAs before they were paid from the GRAT annuity payments; in vacating that portion of the probate court’s order, the appellate court ruled that the issue of priority as to tax apportionment was not ripe for adjudication; no tax had yet been assessed so an apportionment ruling was premature under MCL 700.3922(5)).


(the Obama Administration's EPA announced that it has proposed rules intended to expand the federal government's regulatory reach over waters of the United States that are subject to regulation under the CWA; the proposed rule takes the position that streams, regardless of their size or how frequently they flow, are connected to and have effects on downstream waters; rule also takes position that wetlands and open waters in floodplains of streams and rivers and in riparian areas are integrated with streams and rivers; proposed rules will have significant impact on infrastructure activities, upstream and midstream oil and gas development and real estate development; proposed rules submitted to OMB for review before being made available for public review and comment).


(plaintiffs brought citizen suit action under CWA claiming that defendant’s (U.S. Bureau of Reclamation) Grasslands Bypass Project in San Joaquin Valley of California illegally discharges polluted water (water containing naturally-occurring selenium from soil) into navigable waters of the United States via subsurface tile system under farmland without an NPDES permit; plaintiff directly challenges exemption of tile drainage systems from CWA regulation via “return flows from irrigated water” on basis that groundwater discharged from drainage tile systems is separate from any irrigation occurring on farms and is, therefore, not exempt; court initially refused to grant defendant’s motion to dismiss; in instant case, court dismissed case and specifically noted that parties agreed that only reason project exists is to enable growing of crops which require irrigation and drainage of contaminated water only occurs due to irrigated agriculture; court noted that “return flows” narrows type of water permissibly discharged from irrigated agriculture and covers discharges from irrigated agriculture that don’t contain additional discharges unrelated to crop production; plaintiffs failed to plead sufficient facts to support claim the some discharges unrelated to crop production).


(plaintiff seeks damages for injuries sustained while cleaning stone trap on combine manufactured by defendant when plaintiff’s arm pulled into “accelerator” resulting in amputation of arm; plaintiff seeks damages for defective design, inadequate instruction, failure to warn, loss of consortium and negligent infliction of emotional distress; defendant argues that plaintiff has no expert witness as required by matter of law but sought to prove case by fact testimony of defendant’s witness (Manager of Product Safety) and by comparing combines of other manufacturer’s; court notes that under Restatement (Third) of Torts, as adopted in Iowa, requires plaintiff to show foreseeable risks of harm could have been reduced by an alternative design; court holds that alternative designs for combine with respect to placement of warning sign and other safety devices are understandable by lay persons and expert testimony not required; negligent infliction of emotional distress claim involves questions of material fact to be determined at trial).


(court (opinion by Carter-appointed judge on senior status) determined that defendant’s rules establishing pollution limits (TMDL rules) on Chesapeake Bay are within defendant’s regulatory authority and based on sound science, and that plaintiff’s had sufficient time to comment on rules; court held that TMDL rules exemplify cooperative federalism between defendant and states and that defendant had power to issue TMDLs when states failed to do so and that implementation of TMDLs was joint responsibility of states and defendant; 45-day comment period sufficient).


(manufacturer paid retailers for products distributed through network of retailers, and retailers constructed display area in retail space for manufacturer's products to manufacturer's specifications; parties have agreement providing for repayment of all payments to manufacturer immediately if, within 15 years of constructing display area retailer no longer sells and maintains a full line of manufacturer's products and/or no longer provides servicing; payments made to retailers for construction of space need not be capitalized).


(USDA developed two table grape varieties, secured patents on them, and licensed them to defendant; grape varieties released to growers in mid-2005 and patents secured in early 2006; before the official release a couple of growers began growing grapes from the patented varieties, but did not sell any grapes commercially or give away any mature fruit;  defendant had no reason to believe that growers had unauthorized possession of grapes; patents challenged as invalid due to public use more than a year before date of patent application; patents upheld as valid because growers' use and cultivation of subject varieties was limited in scope and private and vines "hiding in plain sight" such that "invention" not "accessible to the public" or "commercially exploited for more than one year before the inventor sought patent protection).


(plaintiffs, consortium of meat packers and their political lobbying organizations, sued to enjoin country of origin labeling (COOL) regulations that went into effect on May 23, 2013 (even though USDA said it would not enforce COOL rules until Nov. 24, 2013) until lawsuit ultimately decided; plaintiffs claimed COOL rules violated their First Amendment right to not be compelled to speak via providing consumers with more information about where animals from which meat produced were born, raised and slaughtered, and disallowing misleading mixed-country labels; court denied preliminary injunction; while court noted that balance of interests tipped slightly to plaintiffs because COOL rules will cost them more than it would cost defendant for not complying with WTO decision (WTO determined that COOL rules incentivized purchased of U.S. produced meats as opposed to Mexico or Canada-produced meats under generic “USDA” label), court determined that plaintiff not likely to ultimately prevail on lawsuit, would not suffer irreparable injury if injunction not granted and preliminary injunction not in public interest). 


(plaintiff, environmental activist group, sued under Administrative Procedure Act to stop federal government from diverting water in creek due to fears of possibility that native salmon population might thin out in violation of state (WA) water law; court determined that plaintiff lacked standing because federal law does not permit private parties lacking water rights to compel enforcement of state law against U.S. government; court noted that WA Dept. of Ecology has never determined that periodic closure of gates at creek violated state water laws or requires permit).


(health plan qualifies as high-deductible health plan in accordance with I.R.C. Sec. 223(c)(2) even if it provides, without any deductible, preventative health services that are required to be provided by a group health plan or a health insurance issuer offering group or individual health insurance coverage).


(petitioner is self-taught bowler that claimed loss deductions from bowling activity he claimed constituted a trade or business; for year at issue, petitioner employed by postal service and had wage income, but only expenses from bowling activity; return preparer refused to sign return for fear of audit; petitioner kept no records and relied solely on bank statements; court determined that losses were hobby losses deductible only as miscellaneous itemized deductions to the extent petitioner had income; petitioner satisfied none of factors for establishing profit motive and court determined that petitioner did not engage in bowling activity with profit intent;  court also determined, in any event, that losses not substantiated sufficiently to deduct in any event; 20 percent accuracy-related penalty imposed).


(MO "heritage value" statute (MO Rev. Stat. Secs. 523.039 and 523.061), which awards landowner of property that has been owned by same family for more than 50 years 150 percent of fair market value upon condemnation upheld as constitutional; statute satisfies statutory definition of "just compensation" which defines floor beneath which compensation cannot fall and does not set a maximum; primary effect of statute was to serve a public good). 


(at issue was dismissal or conversion of debtor’s Chapter 11 reorganization plan for their tree farming operation; plan proposes to liquidate most of Christmas tree farm and sell off other tracts, and reduced planting schedule but robust harvest schedule so as to pay creditor’s fully secured claim and pay to creditor all proceeds of harvest to creditor; court determined that plan fair and equitable to second largest secured creditor because plan provided for surrender of creditor’s collateral; plan feasible because it contained realistic price and market projections).


(petitioner owned two S corporations and used tax preparer to prepare corporate returns; tax information kept on QuickBooks by petitioner which preparer had access to, but for years in issue petitioner's office being renovated and hard-copy not available; preparer would not prepare returns without source documents; preparer ultimately prepared 1040s but not the 1120s, and noted on 1040s that pass-through income from 1120s not included but would be furnished when available; Form 8275 not attached to either 1040 for years at issue; consequently, Form 1120s late; statement included on return that K-1 income not included because K-1s not available and that petitioner's personal return would be amended as soon as K-1s available; omitted income exceeded $130,000; IRS assessed penalties based on lack of authority for underpayment and since no Form 8275 filed reasonable basis standard inapplicable; penalties affirmed by Tax Court; preparer should have estimated the K-1 income, Filed Form 8275 and then amended return).


(IRS issues finalized regulations concerning the deduction versus capitalization of tangible personal property costs (e.g., “repair regulations); effective for tax years beginning on or after Jan. 1, 2014; taxpayers that don’t elect general asset account (GAA) will have same flexibility to forgo loss upon disposition of structural component as taxpayers not electing GAA treatment; amounts properly expensed under taxpayer’s financial accounting policies deductible (i.e., elimination of de minimis ceiling); safe harbor extended to routine maintenance of buildings, but require 10 years over which taxpayer must reasonably expect to perform relevant activities more than once; qualifying small taxpayer can elect to not apply improvement rules to eligible building property if total amount paid during tax year for repairs, maintenance, improvements and similar activities performed on eligible building does not  exceed lesser of $10,000 or 2 percent of building’s unadjusted basis (note – eligible building property includes building unit of property that qualifying taxpayer owns or leases if unadjusted basis of building unit of property is $1,000,000 or less); definitions changed for “betterments” and “restorations”; threshold for materials and supplies to be exempt from capitalization raised to $200; rules altered for partial dispositions of assets, and qualifying disposition election must be made in some circumstances when assets held in GAA).


(petitioner’s tax preparer failed to report almost $800,000 of income on petitioner’s Schedule C; amount not reported to petitioner or IRS on Form 1099-Misc.; tax preparer suffered stroke and firm prepared return close to filing deadline; petitioner received copy of return three weeks after filed (after filing deadline) and noticed missing income, but assumed it was reported somewhere else on return; IRS asserted accuracy-related penalty, but petitioner argued that reasonable cause and good faith reliance on professional advice present; court agreed with IRS; petitioner should have confirmed that income actually reported elsewhere on return rather than simply assuming it was).


(landowners held a determinable fee mineral interest that would revert to them when oil and gas ceased to be produced from the land, and sought declaratory judgment that such provision terminated under 1985 provision in deed; court determined that deed conveying mineral interest incorporated pre-existing  oil and gas lease on the land that deemed payment of shut-in royalty to be constructive production; while no oil or gas production occurred at time of end of term of mineral deed, shut-in royalties continuously paid; court granted summary judgment to landowners because definition of production contained in lease incorporated into mineral deed; terms of mineral deed control).


(petitioner, a partnership, established trusts and transferred consumer receivables to trusts which were then allocated to sub-trusts; receivables treated as having carryover basis and trust ultimately claimed bad debt deduction due to worthlessness of receivables; IRS issued FPAA to petitioner and asserted that petitioner’s basis in receivables was zero and disallowed loss deduction and asserted penalty petitioner; petitioner claimed partnership status and, as such, any basis adjustment in receivables would impact amount of deduction for bad debts which partnership member could claim on personal return; court held that merely  receiving assets from partnership does not make trust a direct or indirect partner of such partnership under I.R.C. Sec. 6231(a)(2)(B) because trust grantor does not satisfy definition of “partner” under I.R.C. Sec. 6231(a)(2); trust grantor, as such, not eligible to participate in unified audit proceedings under TEFRA).


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