Case Summaries 02/2011
(three-year statute of limitations under I.R.C. Sec. 6501(e)(1)(A) (instead of 6-year statute under I.R.C. Sec. 6501(e)(1)(A)) applies to omission of income exceeding 25 percent of gross income as a result of overstated basis; court's opinion consistent with Ninth and Federal Circuits).
(IRS not entitled to priority status on tax claim arising from 2001; tax claim well outside 3-year look-back period for priority under 11 U.S.C. Sec. 507 and prior petition did not change that result).
(cases involves assessed value of taxpayers' farm and homesite of 14.76 acres which is primarily devoted to growing alfalfa; assessed value more than doubled from 2006 to 2007 allegedly attributable to homesite and residential improvements which were valued separately from ag land; trial court correct to hold that county properly valued homesite at market value separately from adjacent ag acreage under state law).
(court held that above-median debtor with positive disposable income (as calculated under 11 U.S.C. §1325(b)(2)) must have a Chapter 13 plan that is for five years in accordance with court’s construction of 11 U.S.C. §1325(b)(1)(B); but, there is a split in the circuits as to whether reorganization plan must last for full five years when above-median-income debtor has negative or zero disposable income; U.S. Supreme Court denied certiorari).
(boundary between adjacent properties was center of road; court reached determination based on evidence of common usage and acquiescence; boundary could not be determined by deed and original monuments or markers).
(trustee entitled to possession of property as a result of trustee filing forcible detainer action; trustee's claim based on substitute trustee's deed filed to correct5 incomplete property description in prior deed (incomplete metes and bounds description).
(taxpayers, a married couple, filed as MFJ and did not include any of the almost $16,000 in Social Security Benefits received during 2006 in income; under I.R.C. Sec. 86, if AGI plus one-half of S.S. benefits is over $32,000 on MFJ return some of S.S. benefits must be reported; taxpayers' income exceeded base amount and portion of S.S. benefits includible in income; taxpayers' argument that amount "contributed" to S.S. system already taxes and should not be taxed again rejected).
(IRA owner who causes the IRA to acquire a promissory note from a third-party bank where the IRA owner and owner's wife are oblgors on the note has engaged in a prohibited transaction under I.R.C. Sec. 4975; transaction amounts to a direct loan to the beneficiary and statute targets both direct and indirect credit transactions).
(defendant must re-evaluate Southern California's strategies for meeting national clean air standards; defendant acted arbitrarily and capriciously in not ordering California to submit revised plan after finding 2003 rules were deficient; EPA's partial approval of 2003 plan without requiring California to find emission-offsetting strategies violated CAA).
(one-half of tax refund attributable to jointly filed tax return is property of debtor's bankruptcy estate; the other half is attributable to non-debtor spouse; refund resulted from debtor's withholding and tax credits attributable to non-debtor spouse; court adopted presumption that spouses share in equal ownership of tax refund which can be rebutted by evidence of domestic relations court order or written, prepetition contract between spouses designating alternative ownership of tax refunds).
(while unemployment rate declined to 9.0 percent (which is 12.5 percent higher than what Administration promised unemployment would peak at if 2009 stimulus bill passed), U.S. labor market began 2011 with 500,000 fewer jobs than in January 2000; January 2011 labor force participation rate only 64.2 percent; labor force 750,000 workers smaller than when recession began with 4.9 million workers dropping out of labor force and are no longer counted among the unemployed - if only one-half of these persons were in the workforce, the unemployment rate would be 10.5 percent; to achieve pre-recession unemployment rate by 2016, labor market must add 285,000 jobs every month for the next 60 consecutive months).
(plaintiff defaulted on loan obtained to buy property on which plaintiff intended to build personal residence; defendant began foreclosure proceedings and plaintiff sued for wrongful foreclosure, claiming that defendant did not give plaintiff copy of promissory note and, thus, plaintiff did not know if note terms were justifiable; plaintiff also claimed that defendant needed to prove ownership or possession of note; court upholds trial court's grant of defendant's motion to dismiss for failure to state claim on claims of wrongful foreclosure and negligence; appellate court determined that argument concerning promissory note was a defense to a foreclosure action and not a claim for relief and refused to consider it because it was not raised at the trial court level).
(option agreement associated with real estate conveyance transaction involving dairy not ambiguous).
(in response to Senator's request on behalf of constituent, IRS detailed the 2009 and 2010 law which allowed taxpayers to claim a 30 percent credit via I.R.C. Sec. 25C for cost of qualifying energy efficient building envelope components, including certain metal roofs; IRS notes that metal roofs on business property do not qualify for the full credit, but if more than 20 percent of the subject property is used for business purposes, the taxpayer can claim the credit on the roof for the portion of the cost of nonbusiness use of the building).