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10th Cir. Backpedals, Declares Colorado's Tax Reporting Law Is Okay

The Tenth Circuit was recently all but forced to backpedal on a position it held in 2015 in which it held the Tax Injunction Act did not bar a sale-info-reporting suit in federal court. Now that the case is back down from SCOTUS, the Tenth Circuit has ruled that the suit had to go on and that, by the way, the rule did not violate the Commerce Clause.

The court concluded that the reporting requirements imposed by Colorado did not imposed a discriminatory burden on out-of-state vendors when viewed in the totality of context of foreign retailers tax reporting obligations.

Colorado Pot Dispensary Loses Tax Fight at 10th Cir.

Federal prosecutors might look past pot dispensaries in Colorado, but the "tax man never will." This was the conclusion of Tenth Circuit Court Judge Neil Gorsuch who assumed a rather sympathetic tone when addressing the Colorado pot dispensaries. "Maybe we're missing something," he said. "Maybe a future party will show us what it is we're missing."

What cases like this aren't missing is a maddening inconsistency in spirit between state and federal law.

From the 10th: the 2 Most Boring SCOTUS Grants of the Term (So Far)

We're sorry to have to do this. We'll try to minimize your agony. But be warned: These are the two least interesting cases currently on the Supreme Court's docket, and the only two cases to come out of the Tenth Circuit (so far).

What are talking about? Sufficient fact pleading for removal of massive class action lawsuits to federal court and some barely comprehensible case involving the federal Tax Injunction Act and the ability of federal courts to hear non-taxpayers' complaints about a state reporting law that is a "secondary aspect of state tax administration."

Actually, on second thought, these are kind of interesting ... in a "law school casebook fodder/exam torture" sort of way.

10th Wants Stronger Sentence in Tax Evasion Case

The Tenth Circuit found that the government's evidence was valid in proving that appellant had knowingly committed tax evasion, affirming his conviction but reversing a sentence that was originally reduced. 

After a jury trial, appellant Bill Melot had been convicted of one count of attempting to evade or defeat tax, one count of corruptly endeavoring to impede the administration of the Internal Revenue Code, six counts of a willful failure to file, and seven counts of making false statements to the Department of Agriculture. He was sentenced to pay nearly $19 million in restitution to the IRS and to a 60-month term of imprisonment, which was actually a huge downward variance from the sentencing guideline range of 210-262 months.

Colorado has a sales tax of 2.9% for products purchased in the state, and a use tax of 2.9% for products purchased outside the state, but used in the state. Because of the Supreme Court's 1992 decision in Quill Corp v. North Dakota, a state may not collect taxes from "retailers with no in-state physical presence," and Colorado does not collect use taxes from out-of-state (i.e., catalog and online) retailers.

Instead, Colorado puts the onus on the taxpayers to pay their use tax.

SCOTUS Lets 10th Circuit Opinion Stay in Osage Nation Lawsuit

On Monday, the U.S. Supreme Court upheld a Tenth Circuit Court of Appeals decision that imposed taxes on the Osage Nation of the Oklahoma area. The Tenth Circuit lawsuit dealt with the issue of whether tribal citizens who live and work in Osage County are exempt from state income taxes.

The case ends at the Tenth Circuit, as SCOTUS denied the certiorari petition for the Pawhuska-based tribe.

The case arose in 1999, reports NewsOK, when a member of the Osage Nation challenged the state of Oklahoma's right to tax her income.

Tenth Circuit Court of Appeals Rejects Tax Protest

Here’s a long running tax case that has seen its way through the Tax Court, the Federal District Court and the Tenth Circuit Court of Appeals. The case has a bit of everything for the tax practitioner: tax liens,a notice of deficiency, a foreclosure and a tax protest. For all you non-tax lawyers, let’s try to put this in plain English.

From 1990 to 1995, a taxpayer failed to pay his taxes. As a consequence, he received two notices of deficiency from the Internal Revenue Service.

A quick sidebar: A notice of deficiency is known by tax practitioners as the “ticket to Tax Court.”

Klaas v. Apex Ins. Co., No. 09-9012

Tax Court Judgment Affirmed

In Klaas v. Apex Ins. Co., No. 09-9012, taxpayers' appeal from the decision by the United States Tax Court upholding the Commissioner's assessment of income tax deficiencies against the taxpayers for the taxable year 2001, the court affirmed the judgment where the taxpayers failed to show the Tax Court how they were prejudiced by the Commissioner's introduction of a legal theory in post-trial briefing.

Gee v. Pacheco, No. 08-8057

Taxpayer Appeal from Tax Court Decision

In Gee v. Pacheco, No. 08-8057, taxpayers' appeal from the decision by the United States Tax Court upholding the Commissioner's assessment of income tax deficiencies against the taxpayers for the taxable year 2001, the court affirmed the judgment where the taxpayers failed to show the Tax Court how they were prejudiced by the Commissioner's introduction of a legal theory in post-trial briefing.

Reversal of Tax Refund, and Criminal Matter

In Sala v. US, No. 08-1333, an action seeking a tax refund, the court of appeals reversed the district court's order granting the refund, holding that the transaction giving rise to petitioner's claimed tax loss had no economic substance because the claimed loss generated by the program was structured from the outset to be a complete fiction.

US v. Pope, No. 09-4150, involved a prosecution for possessing a firearm while having been previously convicted of a misdemeanor crime of domestic violence.  The court of appeals affirmed the denial of defendant's motion to dismiss the indictment on Second Amendment grounds, holding that all the material facts on which defendant's motion to dismiss relied were outside the indictment, hotly disputed by the government, and intimately bound up in the question of defendant's guilt or innocence.

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