Justia Professional Malpractice & Ethics Opinion Summaries

After an error resulted in omission of a will's residual clause, litigation between the decedent's son and a charitable trust settled with the son receiving $5,600,000 and property and the trust receiving $11,721,141. The Estate filed a claim for federal estate tax charitable deduction. The IRS disallowed the deduction, finding that the contribution was made by the son via the settlement. The district court granted the Estate summary judgment, but found the government's position substantially justified and did not award fees or costs. The Third Circuit affirmed. The award for prevailing parties under 26 U.S.C. 7430 incorporates the Equal Access to Justice Act, 28 U.S.C. 2412(d)(1)(B), under which recovery of fees is barred if a party’s net worth exceeds the statutory amount. Parties seeking to recover under either the prevailing party provision or the qualified offer provision must satisfy the net worth requirements. Although the trust satisfied the net worth requirements as a tax-exempt charitable organization with fewer than 500 employees, the court rejected an argument that it was the real party in interest. View "Estate of Palumbo v. United States" on Justia Law

This case arose from the IRS's investigation of a type of tax shelter known as a "Son-of-Boss" (a variant of the Bond and Options Sales Strategy (BOSS) shelter). Petitioner appealed the Tax Court's decision in favor of the Commissioner of Internal Revenue. The court held that the IRS properly sent petitioner an affected item notice of deficiency because the deficiency required a partner-level determination. The court also held that the Tax Court had jurisdiction to redetermine affected items based on the partnership item determinations in the Final Partnership Administrative Adjustment (FPAA). Therefore, the court affirmed the judgment of the Tax Court. View "Napoliello v. Commissioner of Internal Revenue" on Justia Law

A jury found defendant, a licensed attorney, responsible for trust fund recovery penalties imposed by the IRS pursuant to 26 U.S.C. (I.R.C.) 6672 for unpaid employment taxes owed by Iowa Trade Bindery, Inc. (ITB). Defendant appealed the district court's judgment and "all adverse rulings and orders in this case." The court held that the district court did not abuse its discretion in admitting defendant's signed Form 2751 and an IRS officer's testimony about the form, or by instructing the jury with respect to the form and its effect. The court also held that the district court did not err in denying defendant's motion for judgment as a matter of law where the jury's verdict was supported by substantial evidence. The court concluded that defendant's remaining claims were without merit. Accordingly, the court affirmed the judgment of the district court. View "Moore v. United States" on Justia Law

This case stemmed from the transportation excise tax that National Airlines (National) owed the government. Plaintiff appealed the district court's summary judgment determination that, pursuant to 26 U.S.C. 6672, he was personally liable for the excise taxes that National collected from its passengers but failed to pay over to the United States during his tenure as National's CEO. The court affirmed the judgment of the district court and held that the district court properly found that plaintiff was a "responsible person" and that his failure to pay taxes was willful as defined by this circuit's precedents. View "Conway v. United States" on Justia Law