Annotations 06/2012

(as part of budget bill, provision makes private school scholarships available for students assigned to lowest-performing 15 percent of state's public schools; provision adds $50 million in tax credits for corporations that donate toward scholarships; corporate donations can pay for up to $8,500 in tuition for students to attend private schools ($15,000 for special-education students)).

(community association’s appeal from decision granting dairy and creamery a permit for farm market or farm stand as defined under county ordinance; preservation board holding easement over property approved plans for building; zoning commission granted special exemption; board of appeals approved granting of exemption and district court affirmed board’s opinion; on appeal association argued dairy products not permitted to be sold at farm market and market would create negative impacts to rural community; appellate court affirmed board’s opinion holding county ordinance specifically permits sale of dairy products at farm markets; approved use is not a “commercial use” prohibited under state law; and no evidence presented of any negative impacts of proposed market).

(mother deeded 20 acres of land and house to her youngest daughter after she moved home to care for her mother; later mother deeded entire family farm to daughter reserving life estate; only consideration for both conveyances was “love and affection”; mother later brought action to set aside deeds due to undue influence, fraud, and elder abuse after son found out about transfers; court denied protective order and allowed attorneys who prepared deeds to testify at deposition regarding mother’s state of mind and intent in deeding property to daughter; mother’s own testimony established she deeded property to daughter because she “wanted to”; trial court granted summary judgment to daughter; on appeal court agreed no undue influence or fraud established; court also held no private action for “elder abuse”; trial court opinion affirmed).

(two property owners sought to establish ingress and egress easements promised at time parcels deeded to them after burdened property owners brought suit to quiet title; first property owner had access through private lane that owner improved upon over time; second owner argued easement existed over plaintiffs’ property because creating access from public road would require significant investment; appellate court affirmed trial court’s holding that no express easement reserved because deeds stated only that it was “subject to” easements, but none were reserved; court affirmed finding of implied easement by necessity for first property owner using private lane, but overturned for second property owner; as to second owner, court found no “great present necessity” because public road on property could be accessed despite cost; court held location of home not readily accessible by public road was owner’s choice and owners cannot create their own necessity; first property owner was also given additional fifteen foot easement for snow removal over private lane by trial court; court remanded this issue for lack of evidence establishing necessity of width of snow removal easement; court also remanded for ruling on second owner’s claims of implied easement by prior use and easement by prescription the trial court had not ruled on; court clarified that on remand, amended statutory period of 20 years rather than 5 years did not apply to easement by prescription acquired before amendment).

(plaintiff challenged defendant’s plan to increase herbicide spraying to control invasive plants in Wallowa-Whitman National Forest on basis that defendant failed to properly consider cumulative effects of spraying in conjunction with other actions that might be taken; court determined that plaintiff, environmental group, that defendant had, in part, violated National Environmental Policy Act in its analysis of cumulative impacts of herbicide project; case remanded to defendant for further development of analysis of cumulative impacts, but defendant’s other decisions concerning project not arbitrary or capricious).

(certified question from federal court on whether duty to defend suit against organ donation charity existed; daughter of deceased woman sued organ donation charity in federal court for emotional distress caused by charity’s misrepresentation that it would not profit from donation of mother’s organs; court held emotional distress claim absent physical injury did not fall within policy coverage for personal injury; court also held that neither next of kin nor estate have property rights in tissues of deceased person under Anatomical Gift Act; court held without property rights, no loss of use of tangible property as defined by policy existed; no coverage under policy for claims made by plaintiff, so insurance company has no duty to defend suit).

(petitioner was 80 percent shareholder in S corporation and claimed that she borrowed $600,000 from a third party and loaned them to the S corporation; petitioner claimed that contributed loan amount increased petitioner’s basis in S corporation and allowed petitioner to claim pass-through losses; IRS denied losses on ground that petitioner’s basis did not increase because all funds paid directly by third party to S corporation or were shown as charged to third party’s credit card as payment for corporate expenses; no checks written to petitioner and petitioner did not contribute any personal funds to corporation; no loan agreement executed and no notes existed evidencing any loans to corporation from petitioner; while petitioner signed 27 notes, notes varied in amount and had different maturity dates within a year of execution and were secured by corporation’s receivables; petitioner reported no interest income or constructive dividends; IRS position upheld).

(after discovering dilapidated fence and that neighbor was growing crops on 14 acres of his property, landowner sent letter to neighbor in 1992 requiring lease and $10/year payment for neighbor’s continued use; landowner promptly followed up again in 2004 after neighbor informed potential buyers that landowner did not own 14 acres; landowner got around to filing suit in 2008 to quiet title in disputed property; court held without giving detailed findings that neighbor adversely possessed 14 acres; appellate court affirmed finding neighbor proved adverse possession of property for more than 15 years.)

(estate administrator filed income tax return reporting tax liability of $491,521 on basis that decedent owned fee simple interest in farm; before return filed, decedent’s father sued estate seeking deed reformation on basis that deed contained scrivenor’s error omitting intended reservation of life estate for father; court reformed deed to reserve life estate for father; estate appealed and filed administrative claim for refund of overpaid taxes in amount of $215,323 on basis that value of decedent’s interest in farm overstated due to mistaken belief that decedent owned farm in fee simple; IRS disallowed claim on basis that it was untimely as it was not filed within three years of filing the return or two years from payment of tax; trial court granted government’s motion to dismiss; appellate court affirmed on basis that courts have no ability to equitably toll statutory time limits; court rejected argument that I.R.C. Sec. 6511 three-year time limit started when MS Supreme Court denied certiorari; no violation of due process; estate administrator should have filed protective claim to preserve estate’s interest in refund).

(Chapter 7 case; trustee moved to sell debtor’s interest in farmland; sale allowed if partition impracticable, value of estate’s interest enhanced if co-owner’s interest sold, estate would benefit by such sale and property not used for electric energy or gas production; but, trustee has not begun to market property and no offer on table so matter not ripe for adjudication).

(Court upholds individual "mandate" provision of Patient Protection and Affordable Care Act (PPACA) as a valid exercise of Congress's taxing power; Anti-Injunction Act (AIA) does not bar Court from hearing case because, for purposes of AIA, provision is a penalty and not a tax; but, for constitutional purposes, provision is a tax preconditioned upon not obtaining government-approved health insurance; provision not a valid exercise of Congress's Commerce Clause Power and not valid under the Necessary and Proper Clause; dissent pointed out that the Congress repeatedly referred to provision as a "penalty" and not a tax and is imposed as punishment for not obtaining government-approved health insurance  rather than as enforced revenue contribution to federal government; dissent pointed out that majority had to judicially rewrite the statute to construe provision as both a "penalty" and a "tax"; majority failed to point out that such "tax", while to be enforced by IRS under the Act, IRS has no enforcement authority under Act as it does with respect to legitimate tax provisions). 

(taxpayer's travel reimbursement arrangement under which meals and incidental expenses were paid to non-travelers and day-travelers were not per diem allowances in accordance with Rev Proc 2008-59 or Rev Proc 2009-47; amounts did not constitute deductible travel expenses under Code Sec. 162 ; meal and incidental expenses paid to overnight travelers could be per diem allowances if satisfy I.R.C. Sec. 162 requirements and are per diem allowances in consistent with requirements set forth in Rev. Procs.).

(plaintiffs are U.S. companies that are direct and indirect purchasers of potash; plaintiffs claim that certain global producers of potash of engaging in price-fixing in violation of U.S. antitrust laws; trial court denied defendants’ motion to dismiss; appellate court reversed, but then granted rehearing and overruled itself; trial court correctly concluded that plaintiffs’ complaint states claim under U.S. antitrust laws).

(plaintiffs are U.S. companies that are direct and indirect purchasers of potash; plaintiffs claim that certain global producers of potash of engaging in price-fixing in violation of U.S. antitrust laws; trial court denied defendants’ motion to dismiss; appellate court reversed, but then granted rehearing and overruled itself; trial court correctly concluded that plaintiffs’ complaint states claim under U.S. antitrust laws).

(petitioners, married couple, purchased house with intent to tear it down and construct new on on same property; instead of tearing house down, petitioners donated house to local fire department for fire training exercise in course of which house would be burned down and; petitioners were party that obtained demolition permit and completed all necessary requirements, including execution of documnents giving fire department right to conduct training exercises and burn the house down; house burned down; petitioners reported charitable contribution of $339,504; court upheld IRS denial of charitable deduction in total ($92,865); petitioners did not donate ownership interest in house to charity, but only right to conduct training exercises (license); Sec. 170 (f)(3) denies charitable decution for donation and use property regardless of value; donation was of only a partial interest, and donation of partial interest not deductible; accuracy-related penalty not imposed).

(petitioner, tax compliance officer for IRS, denied charitable, medical and dental expense deductions due to lack of substantiation, and dependency exemptions due to failure of sons to meet age requirements).

(court upholds under arbitrary and capricious standard defendant's finding that carbon dioxide and other "greenhouse gas" (GHG) emissions are a threat to public heath and the environment; litigation in case stems from U.S. Supreme Court opinion in 2007 holding that carbon dioxide and five other GHGs are "pollutants" that could be regulated under the Clean Air Act and ordering defendant to determine whether carbon dioxide emissions were dangerous to human health and environment and whether scientific consensus on GHG effects was settled; in 2009, defendant issued "endangerment" finding determining that carbon dioxide is a pollutant in spite of the fact that it is a colorless, odorless, non-toxic gas that doesn't have direct effect on human health, but because some people believe it can cause the seas to rise, the forests to burn and the globe to warm, and in spite of a lack of scientific consensus on the issue; "endangerment" finding upheld under deferential standard accorded to governmental agencies on basis that finding not completely arbitrary and capricious even though defendant could not provide a specific number at which GHGs cause "climate change", and even though Office of Inspector General, in 2011, released report showing that defendant failed to comply with federal data guidelines when providing its technical support document supporting its "endangerment" finding).

(appeal from bench trial verdict regarding fault and damages from automobile accident on rural county road; plaintiff was speeding when his vehicle left roadway when faced with unexpected 90-degree turn in road; county’s signage warning of turn was mere 110 feet before turn and surface of sign was not retroreflective, which failed to comply with United States Department of Transportation Manual on Uniform Traffic Control Devices controlling traffic control devices in state; court held county’s placement of signage and failure to maintain retroreflective sign was negligent and assessed 60% of fault for accident to county; court held plaintiff’s speeding was also a cause of accident and assessed 40% of fault to plaintiff; plaintiff award $407,163.38 after reduction for his percentage of fault; both parties appealed; appellate court held evidence supported court’s findings on all issues and no error existed; district court ruling affirmed).

(petitioner owned apartment building and a home; during tax year at issue, petitioner sold apartment building for $90,000 gain and excluded it from tax return under I.R.C. §121; exclusion denied due to lack of evidence that petitioner lived in apartment building; petitioner used address of home as mailing address, parked vehicles at home and claimed $20,000 home office deduction for space in home; 20 percent accuracy-related penalty applied; on separate issue, court upheld IRS determination of no deduction for rent not paid by tenants due to lack of substantiation).

(plaintiff and other trade associations petitioned for judicial review of revised EPA rules eliminating opt-out provision for renovations in owner-occupied target housing in which lead-based paint existed; plaintiff held changing policy to eliminate opt-out provision was arbitrary and capricious and required agency to provide justification for change and new data; court held under FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) agencies making change in policy are not subject to heightened standard of review and inquiry is simply whether new policy is permissible rather than whether new evidence supports the change; plaintiff complained EPA failed to do cost benefit analysis before eliminating opt-out provision; court held plaintiff waived argument, but that evidence showed EPA considered costs in making decision; plaintiff also challenged EPA’s violation of the Regulatory Flexibility Act (RFA) for failing to convene a business advocacy panel; court held statute fails to provide judicial review regarding whether panel convened; petition denied).

(criminal appeal from incident in which defendant shot his brother; brothers had acrimonious relationship for many years despite owning adjoining farms; heated situation occurred when one brother accompanied other family members to retrieve grain truck used by defendant and after discussion regarding roaming cattle, defendant and brother had argument; defendant retrieved his rifle and shot into brother’s truck; after scuffle, defendant shot and wounded his brother; jury found defendant guilty of aggravated assault and criminal threat but acquitted him of attempted murder and battery; defendant appealed verdict arguing jury instructions for self-defense and defense of property should have been given; appellate court disagreed finding no evidence of self-defense as brother remained in his vehicle at all times prior to gunshot into truck and no evidence of brother harming property; dissent believed that self-defense jury instruction should have been given due to all facts presented).

(plaintiff brought federal suit against local governments after court-ordered forfeiture of 44 malnourished and neglected horses owned by plaintiff and ordered bond after finding probable cause of neglect; plaintiff’s state appeal was unsuccessful; plaintiff alleged § 1983 constitutional violations against city and town for unlawfully searching her property, confiscating her horses and ordering an excessive fine by obtaining an unreasonable bond in federal court; district court granted motions to dismiss all claims based on Rooker-Feldman doctrine from Rooker v. Fid. Trust Co., 263 U.S. 413 (1923) and D.C. Ct. App. V. Feldman, 460 U.S. 462 (1983); doctrine bars lower federal courts from engaging in appellate review of state court judgments; plaintiff appealed; federal appellate court held that when state court judgment is not itself issue in federal claim, doctrine does not prohibit federal suits regarding same subject matter as same claims presented in state court; court affirmed district court’s dismissal of claims regarding confiscation of horses and bond amount because issues were alleged wrong caused by content of state-court judgment; court allowed search and seizure issue to proceed as it occurred prior to state-court judgment and review not an appeal of state judgment; court admitted federal judgment on search issue could be inconsistent with state court determination of issue, matter to be reviewed under preclusion doctrine instead; case remanded for further proceedings regarding fourth amendment issue).

(IRS publishes temporary and proposed regulations on "tanning tax" included in health care law; disregarded entities (qualified S corp. subsidiaries and single-owner entities that are disregarded as entities separate from their owners) to be treated as separate entities; for amounts paid on or after Jul. 1, 2012, tanning tax (excise tax) to be filed under name and employer I.D. (EIN) of entity instead of disregarded entity's owner; for amounts paid before Jul. 1, 2012, IRS to treat payments made by disregarded entity as having been made or taken by the entity owner). 

(various rulings in Perishable Agricultural Commodities Act (PACA) action determining assets of PACA trust; trust account held assets from auction sale of purchasing company’s assets; intervening plaintiff claimed prior security interest in proceeds of auction based on promissory note with company from 2007; plaintiff not able to meet burden of proving that no PACA trust existed at time asset was purchased, that asset not purchased with PACA assets, or that buyer paid all suppliers prior to purchasing asset under In re Kornblum & Co., 81 F.3d 280 (2d Cir. 1996) standard so auction proceeds to be included in trust; plaintiff’s untimely motion to rule on objections to be considered due to excusable neglect as court ruled waiting for response from adverse party to resolve objections as required by PACA order meets standard; auction company’s objection to disbursement because company’s expenses from auction included in assets in trust overruled because auction was not conducted to increase value of trust for PACA beneficiaries).

(property owner’s appeal from change in property classification from agricultural to residential; 35-acre plot with perpetual conservation easement classified as residential after owners built single family home on parcel; court upheld classification change because conservation easement required 80-acres and forestry uses required 40-acres under statute to be classified as agricultural; board decision affirmed).

(appeal from grant of summary judgment of all issues by district court; plaintiff was police officer who was struck by train while crossing private drive; court held genuine issues of fact existed as to whether train could have used all reasonable means to avoid accident after discovering motorist in peril and that overgrown vegetation and curve of track created jury question as to whether track was “ultra-hazardous” and required train crews to exercise higher standard of care; district court reversed and case remanded).

(breach of contract case in which plaintiff claims that defendant took more water than allowable pursuant to 1991 agreement that addressed use and transportation of water; plaintiff also claims that defendant failed to pay conveyance fee for using canals and ponds to supply water to farmers; court construed plaintiff's claim as one where the plaintiff claimed that defendant knew the amount of water moving through accumulation ponds from the Yuba River and into the water delivery system and that such knowledge had to be disclosed to plaintiff; court rejected plaintiff's claim as unsupported by evidence; critical issue under contract is whether subsurface flow from Yuba River is surface water or groundwater; court deemed it to be surface water for which amounts defendant not bound by contract to pay plaintiff; water at issue not extracted through mechanical means (i.e., pumps and wells)  as contemplated by parties in contract; case on appeal). 

(case involves family holding corporation in which decedent's wife owned 140 Class A preferred shares with par value of $1,000 each; decedent's wife executed will in 1991 but no one informed about it and will stored in lawyer's vault and not retrieved until 2010; decedent's wife died in 1997 as Florida resident; decedent died in 2004 and Form 706 prepared for estate which included decedent's 600 shares and wife's 140 shares in decedent's estate on belief that shares of wife had passed to decedent at wife's death (even though record title to the shares remained in wife's name at date of decedent's death); 740 shares valued at $740,000; IRS valued shares at $142,203,000 (due to the preferred shares constituting over one-third of voting shares in corporation which was enough to block any major change from occurring to the corporation) and filed notice of deficiency for $68,141,250 plus penalties of $27,160,896; wife's will discovered in 2010 which stated that wife owned the 140 shares and directed such shares to be sold or redeemed on her death; petition filed to remove 140 shares from decedent's estate and stock value in total was $600,000; IRS argued statute of limitations and statute of non-claim barred removal, but court disagreed insomuch as no claim against decedent's estate arose by wife's estate during decedent's lifetime; shares not included in decedent's estate because decedent did not exercise dominion and control over shares; decedent's estate not bound by position taken on estate's Form 706).

(plaintiff challenged defendant's 2004 Framework for the Sierra Nevada Mountains as inconsistent with NEPA and APA insomuch as 2004 EIS did not sufficiently analyze environmental consequences of Framework for fish and amphibians; trial court granted summary judgment to defendant; on appeal, court concluded that defendant's analysis of fish in EIS did not comply with NEPA, but analysis of amphibians did comply). 

(appeal from criminal conviction against doctor/farmer for making false statements on application for emergency aid and for selling secured property for emergency loan without notifying Farm Service Agency (FSA); on appeal defendant made multiple claims of error; defendant claimed convictions violated Ex Post Facto Clause of Constitution because at time they were made, no criminal penalty for making false statements to FSA existed because statute mentioned only Farmers Home Administration (FHA), which was separate and distinct agency created under USDA reorganization and statute did not apply to FSA until amendment occurring after defendant’s acts added “successor agency” to statute; court disagreed as precedent clearly established that Ex Post Facto Clause not implicated when statutory change reflects change of name of agency only rather than substance of violation; defendant also claimed prejudicial error in admission of evidence that he personally owned assets (Cessna airplane and cotton gin) pledged for collateral rather than his farming operation, which caused FSA to not find personal liens on property; court found no unfair prejudice as evidence was admitted to show farmer’s involvement in criminal conduct when he claimed lack of intent as defense and limited instruction given to jury; court found no error in trial court’s exclusion of defendant’s expert witness for discovery violation in failing to provide summary of testimony to government as required by rule; court found no error in failing to give defendant’s requested jury instruction; court also found no violation of compulsory process claim when witness was allowed to leave state without being called to testify by government and contact information for witness was provided to defendant; court found exclusion of bank documents was not error because content was cumulative of other evidence presented; finally, court found sufficient evidence existed for rational jury to find all elements of criminal conduct met beyond a reasonable doubt; conviction of all counts affirmed).

(in reversing Tax Court, court held that IRS did not abuse discretion in rejecting petitioners' offer-in-compromise (OIC); petitioners, married couple, transferred property to family member for $1 as part of long-term care planning and had unpaid tax obligation of $400,000; petitioners offered to settle for $10,000 and IRS refused offer; Tax Court determined that petitioners did not own property and ordered IRS to settle matter by accepting offer; on appeal, court held that Tax Court used improper standard of review; court's role in collection due process matters limited to confirming that IRS did not abuse discretion and made reasonable factual and legal determinations; court determined that IRS acted reasonably in concluding that petitioners' owned property at issue and that equity in property mattered in IRS determination to reject compromise offer).

(Native Indian plaintiff was charged with promoting cockfighting in state court; plaintiff sought to have Court of Indian Offenses enjoin state trial and declaring crime occurred on Indian land so there was no state jurisdiction, but case was dismissed for lack of subject matter jurisdiction and plaintiff was convicted of state criminal offense; plaintiff brought suit against Court of Indian Offenses in federal district court; district court denied relief finding officials acting in their official capacity had sovereign immunity from suit; plaintiff appealed; appellate court affirmed on different grounds; court found if Indian court was to give full faith and credit to state court decisions, Indian court could not provide relief plaintiff requested and alternatively, if there was no reciprocity agreement, state court would be under no obligation to recognize Indian court determination regarding issue plaintiff wanted Indian court to remedy; therefore, plaintiff’s claim was not redressable and was dismissed).

(after lengthy dispute regarding rights and obligations concerning the United States and several water districts under San Luis Act in which final judgment of issue affected plaintiff was decided in 2000, plaintiff brought claim for attorney fees; court held plaintiff unable to establish admissible evidence regarding eligibility for fee award which required having net worth less than $7 million; court also denied fees because plaintiff failed to meet 30 day deadline for request after final judgment entered; court also denied discretionary award of fees because reasonable period for request is typically interpreted by local rules, which required request within 28 days; court also rejected request due to lack of authority under statute or common law to fit claims; court declined to review issue as to whether plaintiff was even prevailing party in suit; motion for fees and costs denied).

(property owner brought claim to determine width of gravel road that provides only ingress and egress to land and for interference with owner's right to use road; easement had been in place for eighty years and landowners’ right to easement by implication not at issue; defendant landowner installed posts next to road that restricted plaintiff’s use for pulling horse trailer down road; plaintiff sought to have easement widened to forty feet and damages for interference with use of road; trial court ruled on directed verdict that no evidence existed that easement should be forty feet or that defendants had interfered with plaintiff’s use of road by installing fence posts; court dismissed plaintiff’s suit; plaintiff appealed; appellate court affirmed holding that plaintiff not entitled to forty-foot easement for lack of evidence; court, however, overturned dismissal of plaintiff’s interference claim; court found plaintiff presented evidence that she had used her property for riding horses and had pulled trailers to and from her property for many years prior to the erection of the posts; plaintiff also presented evidence that posts were too close to road for her to continue to use the road in this manner and the posts do not actually enclose anything and were installed in retaliation for a previous legal suit against landowners, which established necessary elements of claim; case remanded to trial court for further proceedings regarding interference and other unresolved issues).

(decedent executed a will; thirty-six hours before his death, he executed a codicil to will that provided bequest of land to cousin’s son with an estimation of acreage and specific location on property, but specifically reserved 45 acres and the home to decedent’s daughter; survey done showed description of property to be conveyed to cousin’s son would leave only 20 acres to daughter; petition was made to court to interpret codicil; trial court found codicil patently ambiguous except for intent that daughter receive 45 acres and home and using extrinsic evidence would require judicial rewriting of codicil, so codicil thrown out and all property given to daughter; cousin’s son appealed; appellate court determined ambiguity was latent because it arose from estimation of acreage and subsequent survey of property that could be remedied and trial court erred by dismissing entire codicil; appellate court overturned trial court opinion and remanded with instructions for surveyor to survey specific acres from boundaries on two tracts mentioned in codicil to distribute specific property decedent intended each party receive from Estate).

(petitioner donated permanent easement to qualified charity on house in historic district in Evanston, IL, to protect architectural aspects of the hosue (facade easement); house subject to mortgage at time of donation and appraisal value easement at $400,000 and petitioner claimed deduction attributable to easement of $129,448; deduction disallowed due to easement not being protected in perpetuity because holder of mortgage had preferential claim to all future insurance and condemnation proceeds up to amounts of outstanding balances of mortgage at that time; Treas. Reg. Sec. 170A-14(g)(6) not satisfied). 

(decedent died in 2010, his wife survived him and was appointed administrator of his estate; a few months later his wife resigned her position due to health issues; the following month, decedent’s original signed will executed in 1980 was mailed anonymously to the trial court; co-executors of decedent’s will petitioned to admit decedent’s will to probate; administrator of estate objected claiming decedent had burned a duplicate original of his will executed in 1980, so he had revoked current copy of will; decedent’s wife died shortly after the petition to admit will was filed; trial court held circumstantial evidence established will burned in front of witness was duplicate original consistent with decedent’s statements that his wife should sell farm and decedent would no longer support his brother after decedent’s death; court held duplicate copy of will was out of decedent’s control, so it was effectively revoked by the burning of the copy in decedent’s control; appellate court disagreed that evidence established duplicate wills were established or that will burned was copy of same will currently in trial court’s possession; court further held that mere revocatory intent is insufficient if no clear evidence of specific acts taken to revoke will exist; appellate court found no clear evidence of duplicate original, so no evidence current will was revoked by burning of a will in front of witness; further, administrator had burden of establishing duplicate will was not in decedent’s possession; administrator was unable to establish evidence of this requirement because will sent to court was from unknown source; will met all statutory requirements for validity, so because administrator’s burden unmet, will should have been admitted; trial court’s opinion reversed and case remanded).

(court approves motion for final approval of class action settlement with Dean Foods Co. and other defendants for $140 million in case involving 7,200 dairy farmers; initial payment of $60 million to be paid with $20 million to be paid annually over next four years; Dean Foods and Dairy Farmers of America (milk marketing cooperative) harmed competition by keeping prices artificially low while milk processors recorded record profits).

(charitable deduction of $59,959 upheld on appeal for donation of historic facade conservation easement on taxpayer's townhouse in historic district; appraiser sufficiently explained how he arrived at valuation numbers before and after easement restriction; irrelevant that IRS believes method employed was "sloppy" or haphazardly applied because pertinent regulation requires only that appraiser identify valuation method that was used and does not required that such method be reliabale; appraiser sufficiently supplied bases for valuation and approach used nearly identical to that approved in Simmons v. Comr., T.C. Memo. 2009-208; appraisal provided IRS with sufficient information to evaluate claimed deduction; petitioner submitted two Form 8283s which combined provided all of the required information and substantially complies with requirement of information required to be submitted; charitable deduction upheld for cash donation to organization arranging donation of easement (which was required as a condition of facade easement donation) - no benefit to taxpayer other than facilitation of facade easement).

(landowner who wanted to build residence on property adjacent to cranberry bog challenged the local conservation commission’s determination that adjacent property had “perennial stream” and a “spring-fed Ag pond”; no definitions for these classifications were in the provisions used by commission; court held definitions were not required to be contained in the provisions because incorporated by reference to state law applicable to Wetlands Protection Act but commission exceeded its authority in making final determination as Department of Environmental Protection (DEP) had final power to make determination; plaintiff had already appealed to DEP, which had made final determination, so appellate court held current suit should have been dismissed by lower court because plaintiff not entitled to two separate avenues of appeal). 

(plaintiff child was injured when riding a horse at her friend’s house; plaintiff’s father told defendant, friend’s father, that plaintiff was not allowed to ride outside of round pen; after 30-45 minutes of observing plaintiff’s riding abilities, defendant allowed plaintiff to ride in pasture; after another 30 minutes, horse bolted toward tree and plaintiff was injured when impaled by branch; defendant was granted summary judgment based on equine limitation of liability act as all parties agreed injury caused by inherent risk of riding; appellate court overturned finding fact question regarding whether allowing plaintiff to ride in pasture after being directed by her father that she was not allowed outside pen was exception to equine act for failing to make a reasonable and prudent effort to determine plaintiff’s abilities to ride; court also overturned summary judgment for additional exception because defendant failed to revise his motion for summary judgment after petition was amended).

(court permitted IRS to recharacterize transaction involving taxpayer that formed two C corporations in which taxpayer's Roth IRAs held 98 percent ownership interest as being subject to I.R.C. Sec. 4973 excise tax on excess contributions; services agreement and payments to corporations simply transferred value to Roth IRAs).

(plaintiff supplier brought action under Perishable Agricultural Commodities Act (PACA) against defendant buyer and its owner for cost of produce accepted by buyer but not paid; defendant failed to answer petition and plaintiff brought Motion for Default Judgment in district court; court found service was properly given and allegations of PACA trust adequately pled; court held the following facts taken as true: plaintiff sold perishable produce through interstate commerce to defendant, statutory notice was provided of trust, but full payment was not received; plaintiff, however, failed to adequately plead facts establishing that individual liability should attach to defendant’s owner; plaintiff failed to allege specific facts regarding improper control of PACA assets relying instead on conclusory statements of breach of fiduciary duties and fraud; district court declined to enter judgment against owner individually, but allowed default against buyer corporation; court entered default judgment in amount of principal, contractual pre-judgment interest, post-judgment interest, and court costs against defendant corporation).

(120-day extension of time granted to make I.R.C. Sec. 1022 election on Form 8939 and allocate additional basis to eligible property with respect to estate of decedent dying in 2010).

(creditor brings motion to dismiss debtors’ Chapter 12 case; debtors’ schedules listed total assets of $145,371 and liabilities of $391,874.95 along with 10 acres of land valued at $70,000 and farm equipment valued at $66,000; debtors claimed their occupation was “cattle raising” but didn’t list any livestock on their schedules; according to tax returns in applicable years before bankruptcy petition filed, debtors failed to establish that more than 50 percent of their gross income came from farming in accordance with 11 U.S.C. Sec. 101(18)(A)(i)); confirmation of Chapter 12 reorganization plan not granted and Chapter 12 case dismissed).

(S corporation shareholder can increase basis through bona fide indebtedness; general federal tax principles to be used to determine bona fideness rather than "actual economic outlay" test; "circular loans" can be bona fide, based on facts and circumstances; guarantees do not constitute bona fide indebtedness unless shareholder actually makes payment; no basis increase for contribution of unsecured demand promissory note; effective upon publishing of regulations). 

(taxpayers invested in biodiesel plant and lost $400,000 when plant failed after only one month of operation; taxpayers claimed state (IA) investment tax credits; IA Dept. of Economic Development approved investment tax credit of $5.2 million via enterprise zone agreement with plant and county; agreement plainly stated that benefits not received if plant failed to comply with contract terms, including job creation and payment of wages; partnership owned plant and passed tax credits through to taxpayer who claimed credits on state return in two tax years after plant failed; IDOR sought repayment of credits from individuals ($42,000); IDOR entitled to seek repayment from individual taxpayers that received value of tax credit; (point of consideration for those interested in investing in such "renewable" technology - Congressional Research Service Report on biodiesel industry (No. 7-5700, R41631, Feb. 11, 2011)(report notes that biodiesel production would not exist if not for tax subsidies from U.S taxpayers; report notes that industry is inefficient and remains dependent on tax incentives and renewable fuels standard mandates)).

(petitioners, married couple, contributed permanent conservation easement in historic preservation facade on NYC townhouse that is designated as certified historic structure; appraiser estimated pre-easement value of property at $2.6 million and that easement reduced value by $290,000; IRS disallowed charitable contribution deduction for petitioner's failure to establish easement's value on basis that appraisal not qualified appraisal for lacking a valuation method; market data approach used to determine "before" value, but appraiser could not "properly estimate" resulting loss in value due to lack of data for comparable properties; court upheld IRS disallowance on basis that appraisal did not include specific basis for value under Treas. Reg. Sec. 1.170A-13; petitioners already barred from altering property under NYC law without approval from Landmarks Preservation Commission). 

(inflation adjustment factor for the I.R.C. Sec. 45Q carbon dioxide sequestration credit for 2012 is 1.0438; credit is $20.88/metric ton of qualified CO2 under I.R.C. Sec. 45Q(a)(1) and $10.44/metric ton of qualified CO2 under I.R.C. Sec. 45Q(a)(2); credit applicable to amount of qualified CO2 captured at qualified facility and disposed into secure geological storage).

(widow stopped making payments on promissory note signed only by deceased husband that was secured by mortgage signed by both; note held by bank and mortgage held by Mortgage Electronic Registration Systems, Inc. (MERS); bank sought to foreclose and MERS assigned mortgage to bank; widow filed summary judgment motion to dismiss foreclosure petition arguing Kansas law precluded recovery because bank failed to demand payment during statutory period after husband’s death and that note was irreparably severed from mortgage; district court ruled in favor of bank on both issues; widow appealed; appellate court held Kansas law relied on by widow does not apply to liens existing at time of husband’s death; court also held MERS was agent of bank, so note was not severed from mortgage).


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