The Oyez Project: Federal Taxation Issues - Federal Taxation

American Automobile Assn. v. U.S.

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Aquilino v. United States

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Arkansas Best Corp. v. Commissioner

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Atlantic Mutual Ins. Co. v. IRS

The Internal Revenue Code allowed property and casualty insurers to fully deduct "loss reserves," or unpaid losses. The Tax Reform Act of 1986 altered the deduction formula. Under the Act, increases in loss reserves that constitute "reserve strengthening," or additions to the loss reserve, were excepted from a one time tax benefit because it would result in a tax deficiency. Treasury regulation and the Commissioner of Internal Revenue interpreted the law to say that any increase in loss reserves constituted reserve strengthening. The Commissioner then determined Atlantic Mutual Insurance Company had engaged in reserve strengthening. The Tax Court disagreed with the government's interpretation. It held reserve strengthening referred only to increases resulting from computational methods. The Court of Appeals reversed the decision. It held reserve strengthening to encompass any increase in loss reserves.

Automobile Club v. Commissioner

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Badaracco v. Commissioner

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Baral v. United States

David H. Baral made two remittances to the Internal Revenue Service towards his 1988 income tax, which was due on April 15, 1989. The first was a standard withholding from Baral's wages throughout 1988 by his employer. The second was an estimated income tax remitted in January 1989 by Baral himself. Baral received an extension until August 15, but did not file the return until June 1, 1993. On the return, Baral claimed a $1,175 overpayment and asked the IRS to apply this excess as a credit toward his outstanding tax obligations for the 1989 tax year. The IRS denied the requested credit citing 26 U. S. C. Section 6511, which states that "the amount of the credit or refund shall not exceed the portion of the tax paid within the period immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return." According to the IRS, Baral had paid no portion of the overpaid tax between February 1, 1990 and June 1, 1993, and therefore he faced a ceiling of zero on any allowable refund or credit. Baral commenced suit for a refund in the Federal District Court, which granted the IRS summary judgment. In affirming, the Court of Appeals concluded that both remittances were paid on April 15, 1989.

Begier v. IRS

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Bingler v. Johnson

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Bob Jones University v. Simon

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Boeing Co. v. United States

In 1971, Congress enacted tax provisions providing special tax treatment for export sales made by an American manufacturer through a subsidiary that qualified as a "domestic international sales corporation" (DISC). Regarding research and development (R&D) expenses, Treasury Regulation 26 CFR section 1.861-8(e)(3) provides what must be treated as a cost when calculating combined taxable income (CTI), and how those costs should be allocated among different products and apportioned between the DISC and its parent. Under this regulation, the Internal Revenue Service reallocated Boeing's company sponsored R&D costs for 1979 to 1987, thereby decreasing the untaxed profits of its export subsidiaries and increasing its taxable profits on export sales. Subsequently, Boeing filed suit, arguing that it had an unqualified right to allocate its company sponsored R&D expenses to specific products and to exclude any allocated R&D from being treated as a cost of another product. In granting Boeing summary judgment, the District Court found section 1.861-8(e)(3) invalid due to a specific DISC regulation giving the taxpayer the right to group and allocate income and costs by product or product line. The Court of Appeals reversed.

Braunstein v. Commissioner

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Bufferd v. Commissioner Of Internal Revenue

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Bulova Watch Co. v. United States

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Cammarano v. United States

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Central Illinois Public Serv. Co. v. United States

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Central Tablet Mfg. Co. v. United States

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Colonial Am. Life Ins. Co. v. Commissioner

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Colony, Inc., v. Commissioner

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Commissioner Of Internal Revenue v. Soliman

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Commissioner Of Internal Revenue v. Fink

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Commissioner Of Internal Revenue v. P. G. Lake, Inc.

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Commissioner Of Internal Revenue v. Key Stone Consolidated Industries, Inc.

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Commissioner Of Internal Revenue v. Schleier

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Commissioner Of Internal Revenue v. Acker

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Commissioner v. "Americans United" Inc.

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Commissioner v. Bilder

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Commissioner v. Bollinger

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Commissioner v. Brown

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Commissioner v. Clark

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Commissioner v. Duberstein.

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Commissioner v. Engle

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Commissioner v. Estate of Hubert

The executors of Otis C. Hubert's substantial estate filed a federal estate tax return about a year after his death. Subsequently, the Commissioner of Internal Revenue issued a notice of deficiency, claiming underreporting of federal estate tax liability caused by the estate's asserted entitlement to marital and charitable deductions. While the estate's redetermination petition was pending in the Tax Court, the interested parties settled on the use of the estate's assets. The agreement divided the estate's principal, assumed to be worth $26 million, equally between marital trusts and a charitable trust. It also provided that the estate would pay its administration expenses either from the principal or the income of the assets. The estate paid about $500,000 of its nearly $2 million of administration expenses from principal and the rest from income. It then recalculated its tax liability, reducing the marital and charitable deductions by the amount of principal, but not the amount of income, used to pay the expenses. The Commissioner concluded that using income for expenses required a dollar for dollar reduction of the deductions. The Tax Court disagreed, finding that no reduction was required by reason of the executors' power, or the exercise of their power, to pay administration expenses from income. The Court of Appeals affirmed.

Commissioner v. First Security Bank Of Utah

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Commissioner v. Gillette Motor Co.

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Commissioner v. Gordon

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Commissioner v. Groetzinger

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Commissioner v. Hansen

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Commissioner v. Idaho Power Co.

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Commissioner v. Indianapolis Power & Light Co.

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Commissioner v. Kowalski

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Commissioner v. Lester

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Commissioner v. Lincoln Savings & Loan Assn.

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Commissioner v. Lobue

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Commissioner v. Lundy

During 1987, Robert F. Lundy and his wife had $10,131 in federal income taxes withheld from their wages. This amount was substantially more than what the Lundys owed in taxes that year, but they did not file their 1987 tax return when it was due, nor did they file a return or claim a refund of the overpaid taxes in the following 2 1/2 years. In 1990, the Commissioner of Internal Revenue mailed Lundy a notice of deficiency for 1987. Subsequently, the Lundys filed their joint 1987 tax return, which claimed a refund of their overpaid taxes. Lundy also filed a petition in the Tax Court seeking a redetermination of the claimed deficiency and a refund. The Commissioner contended that the Tax Court lacked jurisdiction to award Lundy a refund, arguing that if a taxpayer does not file a tax return before the IRS mails the taxpayer a notice of deficiency, the Tax Court can only award the taxpayer a refund of taxes paid within two years prior to the date the notice of deficiency was mailed. The Tax Court agreed, finding also that 2-year "look-back" period applies. In reversing, the Court of Appeals found that the applicable look-back period in these circumstances is three years and that the Tax Court had jurisdiction to award a refund.

Commissioner v. Nat. Alfalfa Dehydrating

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Commissioner v. Noel Estate

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Commissioner v. Portland Cement Co. Of Utah

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Commissioner v. Southwest Expl. Co.

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Commissioner v. Standard Life & Acc. Ins. Co.

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Commissioner v. Stern

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Commissioner v. Stidger

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Commissioner v. Sullivan

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Commissioner v. Tellier

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Commissioner v. Tufts

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Corn Products Co. v. Commissioner

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Cory Corporation v. Sauber

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Cottage Savings Assoc. v. Commissioner of Internal Revenue

For tax purposes, Cottage Savings Association exchanged its interests in the mortgages of 252 single family homes with several other savings and loan associations, receiving in return 305 mortgages that, taken together, had the same market value. The fair market value of the mortgages it gave away, however, were worth $2.5 million less than their original value. In accordance with the accounting procedures of the federal regulatory body of savings and loan corporations, the Federal Home Loan Bank Board (FHLBB), Cottage Savings recorded the exchanged properties as "substantially identical" (because they had the same fair market value).

When Cottage Savings filed its federal income tax return, however, it claimed a $2.5 million loss - the difference between the original value of the mortgages it gave away and the current value of the mortgages it received in return. The IRS refused to recognize the difference as a deductible loss, however, because under section 1001(a) of Title 26 of the tax code, the change in a property's value is only taken into consideration when it is realized through the "sale or disposition of [the] property." An exchange of property only constitutes a "disposition" if there is a "material difference" between the properties exchanged. Because Cottage Savings had reported the properties exchanged as "substantially identical," the IRS ruled, a "disposition" could not have taken place and the loss in value could not be deducted. Cottage savings took the issue to a federal Tax Court, which disagreed with the IRS and ruled the deduction permissible. The Sixth Circuit Court of Appeals reversed, however, siding with the IRS.

Davis v. United States

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Dickman v. Commissioner

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Diedrich v. Commissioner

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Dixon v. United States

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Don E. Williams Co. v. Commissioner

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Donaldson v. United States

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Drye v. United States

In 1994, Irma Drye died, leaving a $233,000 estate. The sole heir to the estate under Arkansas law was Rohn Drye, Jr., her son. Drye owed the Federal Government approximately $325,000 in unpaid tax assessments. The Internal Revenue Service (IRS) had valid tax liens against all of Drye's "property and rights to property" under federal law, 26 USC section 6321. Several months after Drye was appointed the administrator of his mother's estate, he disclaimed his interest in the estate, which then passed under state law to his daughter. Arkansas law provides that the disavowing heir's creditors may not reach property thus disclaimed. Drye's daughter then proceeded to use the estate's proceeds to establish a family trust (Trust), of which she and her parents are the beneficiaries. Under state law the Trust was shielded from creditors seeking to satisfy the debts of the Trust's beneficiaries. After Drye revealed his beneficial interest in the Trust to the IRS, the IRS filed a notice of federal tax lien against the Trust. Ultimately, the District Court ruled in favor of the Government and its lien. In affirming, the Court of Appeals interpreted precedent to mean that state law determines whether a given set of circumstances creates a right or interest, but federal law determines whether that right or interest constitutes "property" or "rights to property" under section 6321, thus subjecting it to federal tax liens.

Enochs v. Williams Packing Co.

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Fidelity-Phila. Trust Co. v. Smith

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Flora v. United States

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Flora v. United States

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Frank Lyon Co. v. United States

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Fribourg Nav. Co. v. Commissioner

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Fulman v. United States

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Gitlitz v. Commissioner

In 1991, P. D. W. & A., Inc., an insolvent corporation taxed under Subchapter S, excluded its entire discharge of indebtedness amount from its gross income. David Gitlitz and other shareholders were assessed tax deficiencies because they used the untaxed discharge of indebtedness to increase their basis in S corporation stock and to deduct suspended losses. Ultimately, the Tax Court held that Gitlitz and others could not use an S corporation's untaxed discharge of indebtedness to increase their basis in corporate stock. In affirming, the Court of Appeals held that the discharge of indebtedness amount first had to be used to reduce certain tax attributes of the S corporation and that only the leftover amount could be used to increase their basis. In so holding, the court assumed that the excluded discharge of indebtedness is an item of income subject to passthrough to shareholders.

Hanover Bank v. Commissioner

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Haynes v. United States

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Hernandez v. Commissioner

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Hertz Corp. v. United States

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Hillsboro National Bank v. Commissioner

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Holywell Corp. v. Smith

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Hoover Express Co. v. United States

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Indopco, Inc. v. Commissioner Of Internal Revenue

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Internal Revenue Commissioner v. Banks

Sigitas Banaitis and John Banks separately argued to the U.S. Tax Court that contingency fees paid to lawyers could be deducted from taxable gross income. The court disagreed and ruled for the Internal Revenue Service. The IRS said Banaitis and Banks owed taxes on contingency fees. Banaitis appealed to the Ninth Circuit Court of Appeals, which ruled that under Oregon law contingency fees could not be taxed as income. Banks appealed to the Sixth Circuit Court of Appeals, which ruled contingency fees were never taxable income. Other federal appeals courts ruled to the contrary. The U.S. Supreme Court consolidated Banaitis' and Banks' cases.

Ivan Allen Co. v. United States

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Jackson v. United States

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Jarecki v. G. D. Searle & Co.

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Jewett v. Commissioner

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Joint Industry Board v. U.S.

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Knetsch v. United States

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Libson Shops, Inc. v. Koehler

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Malat v. Riddell

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Massey Motors v. United States

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Maximov v. United States

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Meyer v. United States

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Meyer v. United States

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Millinery Corp. v. Commissioner

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Murdock Acceptance Corp. v. U.S.

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Nash v. United States

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National Lead Co. v. Commissioner

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National Muffler Dealers Assn. v. United States

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Newark Morning Ledger Co., As Successor To The Herald Co. v. United States

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Nicholas v. United States

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Northeastern Nat. Bank v. U.S.

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O'connor v. United States

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O'Gilvie v. United States

After her death from toxic shock syndrome, Betty O'Gilvie's husband and two children received a jury award of $1,525,000 actual damages and $10 million punitive damages in a tort suit based on Kansas law against the maker of the product that caused Betty's death. The O'Gilvie's paid income tax on the portion of the award that represented punitive damages, but then sought a refund. Subsequently, Betty O'Gilvie's husband sued the Government for a refund and the Government sued the O'Gilvie children to recover the refund it had made earlier. In finding for the O'Gilvies, the District Court found that 26 USC section 104(a)(2), as read in 1988, excluded from gross income the "amount of any damages received... on account of personal injuries or sickness." The Court of Appeals reversed.

Otte v. United States

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Paragon Coal Co. v. Commissioner

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Parsons v. Smith

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Paulsen v. Commissioner

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Peurifoy v. Commissioner

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Phelps v. United States

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Portland Golf Club v. Commissioner

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Putnam v. Commissioner

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Reisman v. Caplin

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Rowan Cos. v. United States

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Rudolph v. United States

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Ryan v. United States

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Schlude v. Commissioner

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Sims v. United States

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Slodov v. United States

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Small Business Adm'n v. McClellan

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Snow v. Commissioner

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Sorenson v. Secretary Of Treasury

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St. Martin Lutheran Church v. South Dakota

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Tank Truck Rentals v. Commissioner

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Thor Power Tool Co. v. Commissioner

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Tiffany Fine Arts, Inc. v. United States

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Turnbow v. Commissioner

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U.S. v. Anderson, Clayton & Co.

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U.S. v. Cannelton Sewer Pipe Co.

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U.S. v. Consolidated Edison Co.

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U.S. v. Durham Lumber Co.

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U.S. v. John Hancock Mut. Ins. Co.

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U.S. v. Manufacturers Nat. Bank

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U.S. v. Pioneer American Ins. Co.

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U.S. v. Union Central Life Ins. Co.

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United California Bank v. United States

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United Dominion Industries v. United States

Under the Internal Revenue Code of 1954, a taxpayer may carry back its "product liability loss" up to 10 years in order to offset prior years' income. United Dominion Industries, Inc. predecessor in interest, AMCA International Corporation, was the parent of an affiliated group filing consolidated returns for the years 1983 through 1986. AMCA calculated its product liability loss (PPL) on a consolidated basis, or a "single-entity" approach. The government's "separate-member" approach would have prohibited 5 of AMCA's 26 members from contributing to the group's total PPL. In 1986 and 1987, AMCA petitioned the Internal Revenue Service for a refund based on its PPL calculations. Ultimately, the District Court applied AMCA's single-entity approach, concluding that if the affiliated group's consolidated return reflects consolidated net operating losses in excess of the group's aggregate product liability expenses, the total of those expenses is a PLL that may be carried back. In reversing, the Court of Appeals applied the separate-member approach.

United States v. Noland

The IRS filed claims in Bankruptcy Court for taxes, interest, and penalties that accrued when Thomas R. Noland, the trustee of the in-debt First Truck Lines, Inc., sought relief under federal Bankruptcy Code. The Bankruptcy Court held that the claims for taxes and interest were the first priority in the case. Consequently, the court subordinated the penalties, to be adjudicated following the taxes and interest, because the penalties were not financial losses for the IRS. The Court of Appeals affirmed the decision.

United States By And Through Internal Revenue Service v. Mcdermott

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United States v. Allen-Bradley Co.

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United States v. American Bar Endowment

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United States v. American College of Physicians

The American College of Physicians, a non-profit, tax-exempt organization, published a monthly medical journal. Within the journal were paid advertisements for products useful in the field of medicine specifically covered by the journal. Section 511(a)(1) of the Internal Revenue Code imposes a tax on "unrelated business taxable income" of tax-exempt organizations. The IRS asserted that the advertising income from the medical journal fell under this category. The American College of Physicians countered that the advertisements were "substantially related" to its tax-exempt purpose of maintaining high standards in medicine, and that they were therefore tax-exempt. When the IRS refused to give the organization a tax refund, it filed suit in United States Claims Court.

The Claims Court held that the advertisements were not substantially related to the organization's tax-exempt purpose and that the income was therefore taxable. On appeal, the Circuit Court of Appeals for the Federal Circuit reversed, ruling that the advertisements helped to educate the journal's readers and was therefore substantially related.

United States v. Arthur Young & Co.

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United States v. Atlas Ins. Co.

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United States v. Basye

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United States v. Bess

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United States v. Bisceglia

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United States v. Boyle

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United States v. Brockamp

Stanley B. McGill, whose estate is administrated by Marion Brockamp, paid the Internal Revenue Service money he did not owe. McGill, or his representative, submitted an administrative refund claim several years past the end of the applicable filing period set forth in the Internal Revenue Code of 1986. McGill asked the court to extend the statutory period for an "equitable" reason, namely that he had a mental disability that caused the delay. Although such a reason is not mentioned in the Internal Revenue Code, the Court of Appeals read the statute as if it contained an implied "equitable tolling" exception, which the court found justified, and therefore permitted the actions to proceed.

United States v. Brosnan

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United States v. Buffalo Sa v. Bank

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United States v. Burke

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United States v. Byrum

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United States v. Calamaro

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United States v. Carlton

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United States v. Cartwright

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United States v. Catto

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United States v. Centennial Savings Bank

Centennial Savings Bank exchanged interests in one set of mortgage loans for another set of mortgage loans of the same market value. The mortgages were worth substantially less at the time they were exchanged than they had been at the time they were acquired, however, and Centennial reported the difference as lost income on its income tax return. In a separate set of transactions, Centennial collected early withdrawal penalties from customers who withdrew their certificates of deposit before they were scheduled. Centennial reported the early withdrawal penalties as "income from the discharge ... of indebtedness," meaning that it did not need to be reported as income under 26 U.S.C. 108(a)(1)(C).

With regard to the exchanged mortgages, the IRS did not allow the deduction, ruling that the properties exchanged had not been "materially different" and that the exchange therefore did not actually produce a reportable loss. With regard to the withdrawal penalties, the IRS ruled that they had to be reported as income. Centennial took the issue to federal District Court, where a judge ruled for the IRS on the mortgage exchange issue but for Centennial on the withdrawal penalty one. The Fifth Circuit Court of Appeals reversed the mortgage exchange holding and upheld the withdrawal penalty holding, siding with Centennial on both issues.

United States v. Chicago, B. &. Q. R. Co.

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United States v. Cleveland Indians Baseball Co.

Under a grievance settlement agreement, the Cleveland Indians Baseball Company owed 8 players backpay for wages due in 1986 and 14 players backpay for wages due in 1987. The Company paid all of the back wages in 1994. No award recipient was a Company employee in that year. The Company also paid its share of employment taxes on the back wages according to 1994 tax rates and wage bases. The payments were subject to Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and taxes on wages to fund unemployment benefits under the Federal Unemployment Tax Act (FUTA). Both tax rates and the amount of the wages subject to tax have risen over time. After the Internal Revenue Service denied the Company's claims for a refund of the payments, the Company initiated suit in Federal District Court. The court, bound by precedent, ordered the Government to refund FICA and FUTA taxes. The Court of Appeals affirmed.

United States v. Consumer Life Ins. Co.

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United States v. Correll

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United States v. Craft

When Don Craft failed to pay federal income tax liabilities for the failure to file federal income tax returns for the years 1979 through 1986, a federal tax lien attached to "all [of his] property and rights to property," pursuant to 26 USC section 6321. After the notice of the lien was filed, Dan and his wife Sandra L. Craft jointly executed a quitclaim deed purporting to transfer to her his interest in a piece of real property in Michigan that they owned as tenants by the entirety. Subsequently, the Internal Revenue Service (IRS) agreed to release the lien and allow the Crafts to sell the property with half the net proceeds to be held in escrow pending determination of the Government's interest in the property. After Sandra brought an action to quiet title to the escrowed proceeds, the Government claimed that its lien had attached to the husband's interest in the tenancy by the entirety. The District Court granted the Government summary judgment. The Court of Appeals, however, held that no lien attached because the husband had no separate interest in the entireties property under Michigan law.

United States v. Dalm

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United States v. Davis

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United States v. Davis

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United States v. Donruss Co.

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United States v. Equitable Life

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United States v. Estate Of Donnelly

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United States v. Estate Of Grace

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United States v. Fior D'Italia, Inc.

Employers must pay Federal Insurance Contribution Act (FICA) taxes, calculated as a percentage of the wages, including tips, that their employees receive. In 1991 and 1992, Fior D'Italia restaurant paid FICA taxes based on the tip amount its employees reported, but the reports also showed that the tips listed on customers' credit card slips far exceeded the reported amount. The IRS made a compliance check and assessed additional FICA taxes using an "aggregate estimation" method, under which it examined the credit card slips; found the average percentage tip paid by those customers; assumed that cash-paying customers paid at same rate; calculated total tips by multiplying the tip rates by Fior D'Italia's total receipts; subtracted the tips already reported; applied the FICA tax rate to the remainder; and assessed additional taxes owed. Fior D'Italia filed a refund suit, claiming that the tax statutes did not authorize the IRS to use the aggregate estimation method. The District Court ruled for Fior D'Italia, and the Court of Appeals affirmed.

United States v. Foster Lumber Co.

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United States v. Galletti

Abel Galletti and his wife, along with another couple, the Briguglios, formed a business partnership. The partnership underpaid its federal employment taxes, and the IRS assessed the unpaid taxes against the partnership (meaning the partnership would be forced to pay the taxes). According to the Internal Revenue Code, if a tax debt is assessed within three years after the return was filed, the government has 10 additional years to collected the money.

More than three years later, the Gallettis and the Briguglios separately filed for bankruptcy. The IRS made a claim in bankruptcy court against the two couples for the taxes assessed against the partnership. The couples objected, arguing that because the partners themselves had not been separately assessed, the statute of limitations had not been extended to the partners.

The bankruptcy court ruled against the IRS, holding that the IRS must assess tax claims against individual partners, not just the partnership, in order to later collect on those claims from the individuals. The district court and a Ninth Circuit Court of Appeals panel both affirmed the decision.

United States v. General Dynamics Corp.

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United States v. Generes

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United States v. Gilmore

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United States v. Goodyear Tire & Rubber Co.

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United States v. Hatter

In 1982, when Congress extended Medicare to federal employees, then-sitting federal judges began to have Medicare taxes withheld from their salaries. In 1983, Congress then required federal judges to participate in Social Security, except for those who contributed to a "covered" retirement program. A "covered" program was defined to include any retirement system to which an employee had to contribute, which did not encompass the noncontributory pension system for federal judges, whose financial obligations and payroll deductions therefore had to increase. A group of federal judges, who were appointed before 1983, filed suit arguing that the 1983 law violated the Constitution's Compensation Clause, which guarantees federal judges a "Compensation, which shall not be diminished during their Continuance in Office." Ultimately, the Court of Federal Claims ruled that a 1984 judicial salary increase cured any violation. In reversing, the Federal Circuit held that the Compensation Clause prevented the government from collecting Medicare and Social Security taxes from the judges and that the violation was not cured by the 1984 pay increase.

United States v. Hemme

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United States v. Hill Et ux.

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United States v. Hilton Hotels

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United States v. Hougham

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United States v. Hughes Properties, Inc.

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United States v. International Business Machines Corp.

Pursuant to the Internal Revenue Code, International Business Machines Corporation (IBM) paid a tax on insurance premiums it paid to foreign insurers to insure exports from the U.S. to foreign countries. IBM sought a refund on the tax and filed suit in the Court of Federal Claims when its refund claim was denied by the IRS. IBM contended the tax violated the Export Clause of the U.S. Constitution, which states that "[n]o Tax or Duty shall be laid on Articles exported from any State." The court agreed. The Court of Appeals affirmed.

United States v. Irvine

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United States v. Kaiser

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United States v. Key

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United States v. Kimbell Foods, Inc.

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United States v. Leslie Salt Co.

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United States v. Midland-Ross Corp.

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United States v. Mississippi Chemical Corp.

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United States v. Mitchell

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United States v. Moore

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United States v. Munoz-Flores

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United States v. National Bank Of Commerce

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United States v. O'malley

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United States v. Patrick

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United States v. Powell

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United States v. Price

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United States v. Ptasynski

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United States v. Randall

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United States v. Reorganized CF& I Fab. of UT

The Employee Retirement Income Security Act of 1974 obligated CF&I Steel Corporation (CF&I) to make annual funding contributions to pension plans they sponsored. The required contribution for the 1989 plan totaled $12.4 million. CF&I failed to make the payment and petitioned the Bankruptcy Court for Chapter 11 reorganization. The Government filed a proof of claim for tax liability arising under the Internal Revenue Code, 26 U.S.C. Section 4971(a), which imposes a 10 percent "tax" on any "accumulated funding deficiency" of plans such as CF&I's. The court allowed the claim, but rejected the Government's argument that the claim was entitled to priority as an "excise tax" under the Bankruptcy Code. The Bankruptcy Court also subordinated the Section 4971 claim to those of all other general unsecured creditors under the Bankruptcy Code's provision for equitable subordination. The court later approved a reorganization plan for CF&I giving lowest priority (and no money) to claims for non-compensatory penalties. The District Court and the Court of Appeals affirmed.

United States v. Rodgers

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United States v. Romani

Both a judgment lien and federal tax liens encumbered the real property of Francis Romani's Pennsylvania estate, worth $53,001, following his death. The estate's administrator sought a county court's permission to transfer the property to the judgment creditor. The Government objected to the conveyance, arguing that 31 USC section 3713(a), which provides that a Government claim "shall be paid first" when a decedent's estate cannot pay all of its debts, prioritized its payment. Nevertheless, the court authorized the conveyance. Ultimately, the Pennsylvania Supreme Court affirmed. The court concluded that Federal Tax Lien Act of 1966 modified the Government's preference and recognized the priority of many state claims over federal tax liens.

United States v. Ron Pair Enterprises, Inc.

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United States v. Skelly Oil Co.

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United States v. Sotelo

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United States v. Speers

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United States v. Stapf

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United States v. Swank

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United States v. Thompson/Center Arms Co.

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United States v. United States Shoe Corp.

The Harbor Maintenance Tax (HMT) obligates exporters, importers, and domestic shippers to pay 0.125 percent of the value of the commercial cargo they ship through the Nation's ports. From April to June 1994, United States Shoe Corporation paid the HMT for articles it exported. U.S. Shoe then filed a protest with the Customs Service alleging that, to the extent the toll applies to exports, the HMT violates the Export Clause of the Constitution, which provides that "No Tax or Duty shall be laid on Articles exported from any State." The Customs Service refuted the accusation, stating that the HMT is a statutorily mandated user fee. U.S. Shoe then sued for a refund in the Court of International Trade (CIT). Granting U.S. Shoe summary judgment, the CIT held that the HMT qualifies as a tax, reasoning that the tax is assessed ad valorem directly upon the value of the cargo itself, not upon any services rendered for the cargo. The Court of Appeals for the Federal Circuit affirmed.

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