Hinck v. United States, 127 S.Ct. 2011 (2007) and United States v. Mount Sinai Medical Center of Florida, Inc., -- F.3d --- (11th Cir. 2007) - Lessons in statutory construction.

A week after Eileen O’Connor had addressed the ABA Tax Section and had reveled in the Government’s victories in the FICA wars over medical residents; the Eleventh Circuit cast a pall over the Government’s victory parade with its decision in United States v. Mount Sinai Medical Center of Florida, Inc., -- F.3d --- (11th Cir. 2007). The Eleventh Circuit’s message to the Government was clear – if the statute is clear there is no need to go any further. Since there is a split in authority, we can pretty much guess were this will end up. Hinck v. United States, 127 S.Ct. 2011 (2007) coupled with EC Term of Years Trust v. United States, - U.S. - (2007) may provide some clues as to how the Supreme Court “interprets” the Internal Revenue Code – can we say strict construction! Continue Reading...

H.R. 2345, the Abusive Tax Shelter Shutdown and Taxpayer Accountability Act of 2007 and economic substance

Last week there was an interesting article on Tax Notes Today as to a pending bill pertaining to Economic substance. But just as quickly, i.e. in a blink of an eye, it was removed. However, this did not stop the story from having a life of its own as I and a few tax litigators debated was it really going to pass. That debate is sill ongoing.

But for those who have not seen the pending language, William Caudill from Fulbright & Jaworski’s Houston office, was kind enough to forward me the legislation that is pending before Congress as to Economic Substance. As they say here its:
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Californians Helping to Alleviate Medical Problems Inc. v. Commissioner; 128 T.C. No. 14 (2007)- A victory for statutory construction and a little common sense

In Californians Helping to Alleviate Medical Problems Inc., the Court analyzed the language and the legislative history of § 280E and held, in good part, for the taxpayer. The Court’s opinion is a framework for statutory analysis and, just as important from a tax litigation perspective, a lesson on how the Court views testimony when it is corroborated by the objective facts. Continue Reading...

ABA Tax Section - Recap

One piece of advice: If you are not a member of the ABA Tax Section then join! If you are a member of the ABA Tax Section then try to attend at least one of the conferences held throughout the year. This year I was fortunate to be part of a panel that presented to the Young Lawyer’s section a Q&A on IDR’s. Continue Reading...

ABA Tax Section Meeting in Washington D.C.

It's that time of the year. This year I will be speaking on Friday , May 11th, from 1:30 - 2:30 p.m. at the following workshop: "Court Practice & Procedure Roundtable Discussion: Practical Tips for Young Lawyers." My topic will be on Information Document Requests ("IDR's") what the IRS wants and how to respond". My colleague will be Joshua Odintz. Joshua will speak on summons. As they say he is good. Our preferred format will be a Q&A. It should be a good session.

My partner Jerry August will be speaking on “Partnership Allocation Issues Under Section 704(B) For The Closely-Held Business; Issuing Interests In Profits And Capital To Service” on Friday, May 11th at 10:00 a.m. If you haven't heard Jerry speak before you are in for a treat.

So if you have a chance stop by and introduce yourself to Jerry or I or both.


Estate of Erickson v. Commissioner, T.C. Memo. 2007-107. Is anyone reading Strangi, Rosen, Bongard, or Shepherd?

Another case where the reader of the opinion is left wondering – Why did this case go trial? The results - Bad facts equals the IRS winning another Family Limited Partnership case. However, there is some positive news to come out this case. Rather than relying on ambiguous, nebulous language, Judge Kroupa rolls up his sleeves and delves into the Bongard standards in detail. Continue Reading...

EC Term of Years Trust v. United States, - U.S. - (2007) Statutory Analysis wins!

The Supreme Court held that as to third party wrongful levy actions there is a specific statute § 7426(a)(1) that governs this area. Therefore, the limitations period for a tax refund action under 28 U.S.C. § 1346(a)(1) does not apply. The outcome is not a surprise but the analysis in the decision, albeit short and simple, again raises questions as to the strategy being employed by the Government in its battles as to tax shelters. Continue Reading...