The Federal Circuit Court of Appeals came down with a ruling on a Son-of-Boss case.
Before we get into the details of what a “Son-of-Boss” case really means, let’s talk a bit about the court’s ruling.
Tax day was earlier this week and a recent case before the Federal Circuit Court of Appeals came out just in time, elaborating the prerequisites of bringing a refund claim.
As with most tax claims that reach the Federal Circuit Court of Appeals, the case doesn’t break down tax issues as much as it talks about appellate procedure in tax cases.
In a ruling that has critics prophesying doom for American industries, a three-judge panel of the Federal Circuit Court of Appeals held that the government cannot impose countervailing duties against China's subsidized tires.
Because China is a non-market economy, the Federal Circuit upheld the U.S. Court of International Trade's order that U.S. countervailing duty law does not apply to Chinese imports. However, the federal court of appeal unanimously affirmed the Trade Court's ruling on a different ground.
The Trade Court initially held that imposing countervailing duties on non-market economy goods could lead to "double counting" since antidumping duties are already assessed on such goods. The Federal Circuit, on the other hand, held that Congress did not intend for government payments to companies in non-market economies be characterized as subsidies.
I scream, you scream, we all scream for ... mellorine?
If Arko Foods International's mellorine is your preferred non-dairy, frozen dessert you can rest assured that your favorite treat remains something "other" than "an article of milk."
For those of you who are unfamiliar with the product, mellorine is frozen dessert similar to ice cream, but with vegetable or animal fat substituted for at least some of the butterfat. Arko imports six flavors of mellorine relevant to this case: purple yam, fruit salad, mango, macapuno, (a type of coconut), durian, (a fruit), and Quezo Royale, (a cheese and coconut flavor also known as Quezo Real).
Court of International Trade's determination that the government owed a refund to an operator of cargo ship for duties imposed
Horizon Lines, LLC v. US, 10-1138, concerned a challenge to the Court of International Trade's conclusion that the government owed an operator of cargo ship a refund for duties imposed on certain work performed on an ocean carrier while the ship was overseas.
Kahn v. Dep't of Justice, 09-3125, concerned a challenge to the Merit Systems Protection Board's final decision that plaintiff did not make protected disclosures under the WPA, in a DEA agent's suit under the Whistleblower Protection Act (WPA). In affirming, the court held that the administrative judge did not err in finding that plaintiff's communications with an agent were not protected disclosures because they were made as part of normal duties through normal channels. The court concluded that plaintiff's report was not a disclosure because he did not reveal something that was hidden and not known to the DEA. Lastly, because plaintiff's communications were not protected under the WPA, the question of whether the government could have shown by clear and convincing evidence that it would have transferred plaintiff on the absence of his communications need not be addressed.
Henry E. & Nancy Horton Bartels Trust for the Benefit of Cornell Univ. v. US, 09-5122, concerned a challenge to the Court of Federal Claims' denial of a claim, in a university trusts' tax refund suit. In affirming, the court held that the securities purchased on margin by otherwise tax-exempt organizations are debt-financed property, and thus, income from an unrelated trade or business, which is subject to the UBIT.
Green Edge Enter., LLC v. Rubber Mulch Etc., LLC., 09-1455, involved a suit for infringement of a patent related to a synthetic mulch that is colored with a water based acrylic colorant to imitate natural mulch. In reversing, the court held that the district court erred by invalidating a patent, and by dismissing defendant's trademark claims. The court also reversed as the district court abused its discretion by precluding all damages evidence for the Lanham Act counterclaims. However, the court affirmed the district court's holding with respect to counterclaims of noninfringement and invalidity of the mark as there was no case or controversy.
Geoddel v. Sugano, 09-1156, concerned a challenge to the Board of Patent Appeals and Interferences' decision that appellee is entitled to the benefit of the filing date of its initial Japanese application in awarding appellee priority as to the counts of both interferences, in two related patent interference priority contests, related to human fibroblasts interferon used in combating pathogens and tumors. In reversing, the court remanded the matter in concluding that the Board's decision that the Japanese Application constitutes constructive reduction to practice of the subject matter of these interferences is not in accordance with law, for the Japanese Application does not meet the criteria of section 112, first paragraph, as to this subject matter.
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Found. of Human Understanding v. US, 09-5129, concerned a challenge to the United States Court of Federal Claims' decision that a nonprofit organization did not qualify as a "church" under section 170(b)(1)(A)(i) of the Internal Revenue Code for the period from January 1, 1998 through December 31, 2000.
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., No. 09-1102, concerned a patent infringement suit, related to patents for disclosing a magnetic snap fastener commonly used in women's handbags. In affirming in part, the court held that the district court was correct in holding the '773 patent unenforceable as the plaintiff and its president attempted to defraud the PTO. The court also held that the district court did not err in finding that this case was an exceptional case under 35 U.S.C. section 285 justifying an award of attorney's fees. However, the court reversed in part in holding that the district court abused its discretion by sanctioning plaintiff's attorney under 28 U.S.C. section 1927 as the court failed to find that the attorney acted in bad faith.
Stobie Creek Inv. LLC. v. US, No. 08-5190, concerned a challenge to the Court of Federal Claims' decision upholding the Notices of Final Partnership Administrative Adjustment determinations and associated penalties in a tax refund suit involving the "Son of BOSS" tax shelter. In affirming the judgment, the court held that the district court properly disregarded a series of transactions under the economic substance doctrine, that the plaintiff was properly subject to accuracy-related penalties under 26 U.S.C. section 6662, and that the reasonable-cause defense in 26 U.S.C. section 6664(c)(1) does not apply because it was not reasonable for plaintiff to rely on the advice of professionals in promoting and implementing the tax shelter. Furthermore, the court held that the testimony of plaintiff's expert was properly excluded under Federal Rule of Evidence 702.
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In Strategic Hous. Fin. Corp. of Travis County v. US, No. 09-5078, the Federal Circuit faced a challenge to the order of the U.S. Court of Federal Claims (CFC) dismissing plaintiff's suit against the U.S. to recover its arbitrage rebate for lack of jurisdiction under I.R.C. section 7422(a).
In affirming the dismissal, the court held that section 7422(a) prohibits a court from asserting jurisdiction to hear a bond issuer's claim to recover an arbitrage rebate when the issuer failed to first seek an administrative refund from the IRS. However, the portion of the CFC's judgment regarding whether I.R.C. section 148(f)(3) grants the Secretary of the Treasury unfettered discretion to accelerate an arbitrage rebate is vacated as the court should not have conducted an APA analysis after recognizing that it lacked jurisdiction.
Nielson v. Shinseki, No. 09-7129, concerned a challenge to the final judgment of the U.S. Court of Appeals for Veterans Claims denying petitioner entitlement to Department of Veterans Affairs outpatient dental treatment and related dental appliances. In affirming the judgment, the court held that a "service trauma" under the statute is an injury or wound produced by an external physical force during the performance of military duties, and does not include the intended result of proper medical treatment, such as extraction of teeth due to periodontal infection.
Roberson v. Shinseki, No. 09-7093, concerned a challenge to the Court of Appeals for Veterans Claims' affirmance of the Board of Veterans' Appeals' decision denying petitioner's claim for death and indemnity compensation for her husband's death from non-service connected cancer. In affirming the denial, the court held that the Veterans Court correctly interpreted the elements required for a claimant's recovery under the previous version of 38 U.S.C. section 1151.
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