Tenth Circuit Sides With Government on Intermountain Issue

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May 31, 2011

The Tenth Circuit, after a long period of deliberation, has reversed the Tax Court in Salman Ranch.  (Opinion linked here.)  This now makes the score 3-2 in favor of the government in the series of appeals that have spread to most circuits.  See our original report here.

The Tenth Circuit’s opinion closely tracks the reasoning of the Federal Circuit in Grapevine.  The court first looked at the Supreme Court’s decision in Colony and concluded that it should not be read as holding that the statute unambiguously supports the taxpayer’s position.  (The Tenth Circuit did note its … Read More

Cert Granted in Kawashima

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May 23, 2011

The Supreme Court this morning granted certiorari in one case, Kawashima v. Holder, on which we have been reporting for some time.  See our original post here.  As we observed in our report on the cert petition, the Court always has the option of limiting its grant of certiorari to a subset of the questions presented in the petition, and it has exercised that option here.  The Court will resolve only the first question presented — namely, whether violations of 26 U.S.C. 7206 (subscribing to a false statement on a tax return) are “aggravated felonies” that can justify … Read More

Government Brief Filed in PPL

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May 23, 2011

The government has filed its brief in the Third Circuit in PPL.  The brief is virtually identical to the brief filed a few weeks ago in the Fifth Circuit in Entergy that addresses the same issue of the creditability of the U.K. Windfall Tax under Code section 901.  See our initial report here.  The only significant differences are addressing PPL’s facts instead of Entergy’s and placing more weight on Third Circuit precedent instead of Fifth Circuit precedent.  The essence of the government’s argument is that the section 901 determination should be based entirely on the text of the … Read More

Briefing Under Way in Anschutz

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May 17, 2011

As we’ve reported in the last few months, several securities lending cases are percolating in the appellate courts (see here and here).  On April 29, 2011, Anschutz Company filed the opening brief in its appeal of the Tax Court’s decision for the government (opinion and brief linked below).

At issue in Anschutz is the appropriate tax treatment of a set of transactions between the taxpayer and Donaldson, Lufkin & Jenrette Securities Corp. (“DLJ”).  The taxpayer sought to leverage long-held shares in publicly-traded railroad companies to obtain financing for other endeavors.  In the taxpayer’s hands, the shares had a low … Read More

Supreme Court Defers Decision on Kawashima Petition

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May 16, 2011

The Supreme Court was expected to announce this morning whether it would grant certiorari in the Kawashima case, but today’s order list contained no order in the case.  Instead, the Court has “relisted” the petition for consideration at this week’s conference.  That means that the case has caught the Court’s attention and distinguished itself from the mass of cert petitions that are routinely denied, with some of the Justices determining that the petition warrants more careful study.  Although the odds that the petition will be granted have increased, it remains true that most cert petitions are denied, even the ones … Read More

Taxpayer Brief Filed in Entergy

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May 13, 2011

The taxpayer has filed its answering brief in Entergy defending the Tax Court’s decision that the U.K. windfall tax is a creditable tax for purposes of the foreign tax credit under Code section 901.  See our original report here.  According to the taxpayer, the essence of the government’s argument is that “the creditability of a foreign tax can be determined only by the literal text of the foreign tax statute, and that the consideration of any other evidence is legal error.”  This position, the taxpayer argues, is rebutted by “overwhelming authority establishing that the predominant character of a foreign … Read More

Update on Bush-whacked

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May 13, 2011

The en banc Federal Circuit heard oral argument in the Bush TEFRA case on Wednesday the 10th of May.  For those still interested after reading this, you can listen to the argument here.  As we indicated in our prior analysis, we think the resolution of this case is simple.  Unfortunately, although the parties and the court almost escaped the weeds several times, with one of the judges asking a question very close to the mark, it was a dissatisfying oral argument (from our perspective).  The point that needed to be made is that an agreement to “no change” … Read More

United States Opposes Certiorari in Kawashima

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May 9, 2011

After four extensions, the government finally filed its response to the petition for certiorari in Kawashima.  As we previously reported (see here and here), that petition raises a question on which the courts of appeals are in conflict — whether a tax offense other than tax evasion can be an “aggravated felony” for purposes of the immigration laws, which would justify deportation of a resident alien.  Maybe the government was spending all that extra time considering whether to “acquiesce” in the petition and invite the Supreme Court to resolve the conflict, or maybe it was just taking its … Read More

Fifth Circuit Affirms in Container

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May 3, 2011

The Fifth Circuit yesterday issued a short, unpublished opinion affirming the Tax Court’s decision in Container.  As discussed in more detail in our earlier post, the issue is the sourcing of guarantee fees charged by a Mexican parent to guarantee notes issued by its U.S. subsidiary.   The Fifth Circuit ruled that the issue turned to a considerable extent on the Tax Court’s factual findings concluding that the fees were payments for services, which it found were not clearly erroneous.  The Fifth Circuit concluded that the Tax Court’s ultimate characterization of the fees as foreign-source income was correct because … Read More