9th Circuit Tax Law News - U.S. Ninth Circuit
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Irwin Schiff is famous in certain circles -- so much so, that he has his own Wikipedia page. Schiff has been in and out of prison for much of his life due to his leadership in the tax protester movement, with convictions and protests spanning multiple decades. He's also written a number of books on the subject, each advocating ways (legal and illegal) to avoid paying income taxes.

In 2005, Schiff and two associates were convicted of tax evasion and other false filing and conspiracy charges. Yesterday, the Ninth Circuit, in a brief, unpublished memorandum, declined to come to the rescue, despite Schiff's claims of ineffective assistance of his appellate counsel.

Blue Lake Rancheria is Common-Law Employer Under FUTA

Mainstay Business Solutions won its case in the Ninth Circuit Court of Appeals under the Federal Unemployment Tax Act this week, but the victory is too little, too late. The company was forced to close in April as a result of an ongoing dispute with the California Economic Development Department (EDD).

Blue Lake Rancheria, a 53-member, federally recognized Indian tribe located in Humboldt County established Mainstay Business Solutions, a staffing firm, in May 2003 as a for-profit business owned by, and operated for the benefit of, the Tribe.

Rumor has it that the healthcare litigation is finally making its way to the Golden State.

Well, it’s not quite rumor if it’s in a press release .

The 9th Circuit Court of Appeals has joined the ranks of the 4th Circuit and the 6th Circuit in hearing the case against health insurance reform. According to a press release at Standard Newswire, the 9th Circuit at the federal courthouse in Pasadena will hear the constitutional challenge to the “individual mandate” on July 13, 2011. Written briefs on this matter have already been submitted.

Comm'r. of Int'l. Rev. v. JT USA, LP, No. 09-70219

Dismissal of Appeal From Interlocutory Tax Order

In Comm'r. of Int'l. Rev. v. JT USA, LP, No. 09-70219, the IRS's appeal from a tax court's interlocutory order in a partnership tax proceeding, the court dismissed the appeal where the court lacked appellate jurisdiction under either the practical finality doctrine or the collateral order doctrine.

 

Lowe v. Washoe Cty., No. 09-15759

Property Tax Challenge

In Lowe v. Washoe Cty., No. 09-15759, an action by the putative representatives of a class of approximately 9,000 Incline Village and Crystal Bay, Nevada property owners, alleging that the valuation of their Nevada real property used to calculate their ad valorem property taxes for the 2008-09 taxable year violated both the Nevada Constitution and the Due Process Clause, the court affirmed the dismissal of the complaint where the Tax Injunction Act barred the action because: 1) as to individual taxpayers, Nevada's administrative and judicial review process provided an effective and adequate means by which a dissatisfied taxpayer may contest his property valuation; 2) plaintiffs did not demonstrate that the state court remedy in this case was uncertain and therefore not "plain"; and 3) plaintiffs' claims of bias did not impeach the adequacy of the state court remedy.

 

Stahl v. US, No. 10-35006

Income Tax Refund Action

In Stahl v. US, No. 10-35006, an action for a refund of personal income taxes, the court reversed summary judgment for the U.S., holding that plaintiff was an employee of the corporation at issue, and, therefore, his medical and meal expenses were deductible at the corporate level when the company's taxable income was determined.

 

D.N. v. US, No. 10-35037

Tax Refund Action

In D.N. v. US, No. 10-35037, a tax refund action involving funds paid from deceased father's 401(k) retirement account to plaintiff-son because mother, the primary beneficiary, was ineligible under Oregon law to receive them because she was the "slayer" of plaintiff's father, the court affirmed summary judgment for the IRS where plaintiff was the distributee of the funds, not his mother, and thus plaintiff was properly liable for the tax.


Nisqually Indian Tribe v. Gregoire, No. 09-35725

Indian Cigarette Sale Taxation Case

In Nisqually Indian Tribe v. Gregoire, No. 09-35725, an action claiming that the State of Washington breached a contract with plaintiff Indian tribe by entering into an agreement with another tribe, governing taxation of cigarettes at Frank's Landing in Washington, the court affirmed summary judgment for defendants where 1) plaintiff had no private right of action to enforce the statutes governing the parcel of land at issue; and 2) plaintiff's agreement with Washington did not grant it the exclusive right to sell cigarettes at Frank's Landing.

FTC v. Network Servs. Depot, Inc., No. 09-15684, concerned an action by the FTC against defendants for making material misrepresentations and engaging in deceptive business practices in violation of Section 5(a) of the Federal Trade Commission Act.  The court affirmed judgment for plaintiffs on the grounds that 1) the facts led only to the conclusion that defendants had actual knowledge that at least some of their company's representations were false and potentially misleading; and 2) the district court did not commit reversible error by imposing a constructive trust upon $238,300 in fees that defendant paid to defense counsel.

Hawn v. Exec. Jet Mgmt., Inc., No. 08-15903, involved an action by flight attendants who were dismissed for sexual harassment, alleging discrimination on the basis of race, sex and national origin in violation of Title VII.  The court affirmed summary judgment for defendant on the grounds that 1) the district court did not err by focusing on the inference of discrimination that was central to plaintiffs' case; and 2) even assuming the female flight attendants reported to the same supervisor as plaintiffs, the two groups were not similarly situated because the female employees' alleged conduct was not unwelcome and never resulted in a complaint.

Jules Jordan Video, Inc. v. 144942 Canada Inc., No. 08-55075, involved an action by an adult video actor claiming that defendants copied and sold thirteen copyrighted adult DVDs featuring plaintiff's performances.  The court affirmed partial judgment as a matter of law for defendants on the grounds that 1) plaintiff's right of publicity claim was preempted by the Copyright Act; but 2) plaintiffs had standing to assert the copyright claims in question.

Lockwood v. Comm'r Soc. Sec. Admin., No. 09-35546, concerned a petition for review of the denial of social security benefits to petitioner, claiming that the ALJ erred when she failed to explain in her written decision why she treated a social security claimant as being a person closely approaching advanced age instead of treating the claimant as being a person of advanced age.  The court denied the petition on the ground that the ALJ did not err because she was required by regulation only to consider whether to use the older age category.

US v. Hall, No. 08-17267, involved debtors' appeal from the district court's reversal of the bankruptcy court's order sustaining the IRS's objection to debtors' proposed reorganization plan.  The court reversed where, since the chapter 12 estate is not a taxable entity, the chapter 12 estate cannot "incur" a tax.

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Xilinx, Inc. v. Comm'r. of Int'l. Rev., No. 06-74246, involved a tax court petition challenging the IRS's determination that, under the tax regulations in effect during tax years 1997, 1998 and 1999, related companies engaged in a joint venture to develop intangible property must include the value of certain stock option compensation one participant gives to its employees in the pool of costs to be shared under a cost sharing agreement, even when companies operating at arm's length would not do so.

Compton Unified Sch. Dist. v. Addison, No. 07-55751, concerned an administrative claim under the Individuals with Disabilities Education Act (IDEA) for failure to identify plaintiff-student as disabled.  The court of appeals affirmed judgment on the pleadings for plaintiff, holding that 1) a reading of the IDEA that left parents without an adequate remedy when a school district unreasonably failed to identify a child with disabilities would not comport with Congress' acknowledgment of the paramount importance of properly identifying each child eligible for services; and 2) considering plaintiff's substantial degree of success in administrative and district court proceedings, the district court did not abuse its discretion in awarding attorneys' fees.

In re: Taylor, No. 08-60033, involved debtors' appeal from the bankruptcy court's order avoiding a transfer of a security interest in an automobile to a bank.  The court of appeals reversed, holding that the bankruptcy court's determination of the value of the security interest was clearly erroneous, because there was no evidence to support the bankruptcy court's finding that the value of the security interest equaled the amount of the original loan at the time the bank perfected its security interest.

In US v. Nevils, No. 06-50485, the court of appeals affirmed defendant's firearm possession conviction, on the ground that, viewing the evidence as required by Jackson v. Virginia, there was sufficient evidence to permit a rational juror to conclude beyond a reasonable doubt that defendant knowingly possessed firearms and ammunition.

In re: Marshall, No. 02-56002, concerned an action based on defendant's purported tortious interference with a substantial inter vivos gift that plaintiff's late husband intended to give to her.  The court of appeals reversed judgment for plaintiff, holding that a prior Texas probate court judgment should have been afforded preclusive effect because it was the earliest final judgment on matters relevant to the proceeding.

Edgerly v. San Francisco, No. 05-15080, involved a 42 U.S.C. section 1983 action against police officers and a city alleging that the officers unlawfully arrested and searched plaintiff in violation of the Fourth Amendment.  The Ninth Circuit affirmed judgment for defendants in part, holding that 1) plaintiff did not provide sufficient evidence that the officers were acting pursuant to a city policy of conducting strip searches without reasonable suspicion; and 2) the district court did not err in sanctioning plaintiff for filing frivolous motions for reconsideration because its finding that plaintiff's motions did not raise any new issues was not clearly erroneous.  However, the court of appeals reversed in part, holding that, viewing the evidence in the light most favorable to plaintiff, a reasonable jury could find that the officers subjected him to an unreasonable search.

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