Supplying Some Missing Links

In addition to providing analysis and updates on pending tax appeals, this blog is intended to serve as a resource where readers can easily access the briefs and relevant opinions in those cases.  Because of the press of business and other reasons, the posting of a couple of the opinions in cases we have discussed has slipped through the cracks.  So we are providing links to those opinions here, even though the opinions are long past the point of “breaking news”:

The Second Circuit’s decision in TIFD (“Castle Harbour”), once again reversing the district court and holding that the banks … Read More

Supreme Court Review Sought in Union Carbide

Union Carbide has filed a petition for certiorari, docketed as No. 12-684, asking the Supreme Court to review the Second Circuit’s rejection of its research credit claim.  See our prior reports describing the issue and reporting on the decision.

The petition articulates two questions presented:  1) the basic substantive tax question whether, in the context of a production process experiment, the research credit is limited to the costs of supplies that would not have been incurred but for the experiment; and 2) whether the court erred in deferring to the IRS’s proffered interpretation of its own research credit regulations.  … Read More

Appeal Dismissed in Cadrecha

The Federal Circuit yesterday dismissed the taxpayer’s appeal in Cadrecha.  As noted in our prior post, this was a formality after the parties agreed to settle the case.… Read More

Taxpayer Responds to Petition for Rehearing in Quality Stores

Following up on the Sixth Circuit’s order, the taxpayer has now filed a response to the government’s petition for rehearing en banc in Quality Stores.  See our prior reports here.  The brief offers a point-by-point response to the government’s petition, arguing in particular that the Sixth Circuit was correct in relying on Coffy v. Republic Steel Corp., 447 U.S. 191 (1980), and disputing the government’s contention that the panel’s decision was inconsistent with earlier Sixth Circuit decisions.

The petition is now back in the lap of the Sixth Circuit, which could rule in the next few weeks … Read More

Sixth Circuit Orders Response to Government’s En Banc Petition in Quality Stores

The Sixth Circuit yesterday directed the taxpayer to file a response to the government’s petition for rehearing en banc in Quality Stores.  As we previously noted, the Federal Rules of Appellate Procedure prohibit responding to rehearing petitions unless ordered by the court, but such an order in this case was a strong possibility.  Courts of appeals frequently direct responses to rehearing petitions filed by the government, and the government’s petition highlights why this case is a strong candidate for the relatively rare action of rehearing en banc.  If the court’s order is surprising at all, it is that … Read More

Opening Briefs Filed in Rodriguez

The parties have now filed their opening briefs in the Fifth Circuit in Rodriguez, an appeal from the Tax Court’s decision that section 951 inclusion income is not to be taxed at the lower rate applicable to qualified dividends.  See our prior report here.

As they argued in the Tax Court, the taxpayers emphasize a policy argument, stating that “Subpart F’s general purpose and mechanics should govern” and “Subpart F treats the amount included in the U.S. shareholder’s gross income essentially like a dividend.”  The taxpayer also invokes substance vs. form principles and statements in the legislative history … Read More

Cadrecha Appeal to Be Dismissed Following Settlement Agreement

We have previously reported on the taxpayers’ appeal in Cadrecha from an application of the statute of limitations that the Court of Federal Claims acknowledged as “harsh,” but found to be required by law.  The taxpayers’ brief emphasized the unfairness of the result, and it struck a chord with the Department of Justice, whose appellate lawyers concluded that the taxpayers ought to get a break — either because they deserved one or perhaps because DOJ feared that the facts were so sympathetic that they created a risk of an adverse Federal Circuit decision that would cause mischief down the road.… Read More

Supreme Court Agrees to Hear Foreign Tax Credit Issue in PPL

The Supreme Court this morning granted PPL’s petition for certiorari and will decide the question of the availability of the foreign tax credit for payments of the U.K. Windfall Tax on which we have reported extensively before.  See here and here. The Court took no action on the government’s petition for certiorari in the companion Entergy case from the Fifth Circuit.  That is a common practice for the Court when two cases present the same issue.  The Court will “hold” (that is, continue to take no action on it) the Entergy petition until it issues a decision in PPL… Read More

Rehearing Denied in Historic Boardwalk

The Third Circuit yesterday denied the taxpayer’s petition for rehearing en banc in Historic Boardwalk in what seems like record time (the petition was filed on October 10).  The taxpayer’s last hope is to seek Supreme Court review, though the case does not look like one that could pique the Court’s interest.  A petition for certiorari would be due on January 22.… Read More

Government Seeks Rehearing En Banc in Quality Stores

The government yesterday filed a petition for rehearing en banc in the Sixth Circuit in the Quality Stores case, asking the full court to reverse the panel and eliminate the circuit conflict on the treatment for FICA purposes of supplemental unemployment compensation benefits.  As noted in our previous post, regardless of whether the petition is granted, the mere filing of the petition has the effect of postponing the deadline for seeking Supreme Court review.  The 90-day period for filing a petition for certiorari begins to run anew from the date of the resolution of the rehearing petition.  Thus, if … Read More

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