Tax Carnival #58: TaxtoberFest 2009
The IRS' electronic future

Tax cases not popular among Justices

US Supreme Court The first Monday in October kicked off a new U.S. Supreme Court term.

While everyone is anxiously awaiting the first bench pronouncements from new Justice Sonia Sotomayor, one thing about this Court is already abundantly clear. These justices aren't very interested in hearing tax matters.

The publication Tax Analysts (subscription required) reports that on its opening day, the Court denied certiorari in a number of federal and state
tax-related cases. "Certiorari Denied" basically means that the Court has declined to hear the case and will let the prior ruling stand.

Amid the tax cases refused by the Supreme Court, several with Texas connections naturally caught my eye.


Charitable deduction denied: Sherrel and Leslie Jones wanted the High Court to review a Tenth Circuit decision that denied some of the couple's charitable contribution deductions.


Leslie Jones was an attorney for convicted Oklahoma City bomber Timothy McVeigh. Jones had tried to claim as deductions the case materials donated to the University of Texas. The Tenth Circuit ruled that the Joneses had no basis in the materials, therefore they couldn't deduct them. The Supreme Court has allowed that decision to stand.


Tax protester must pay: In another case, a Lone Star State tax protester who claimed he was "improperly labeled a taxpayer and had his money taken without his consent" by the IRS also was disappointed by the Supreme Court.

The Fifth Circuit had rejected Robert Douglas' contention that only federal government employees had to pay U.S. income taxes. The High Court let the appellate court levy ruling stand.


Oil company avoids royalties: One of the iconic emblems of Texas is oil, and the Supreme Court's decision not to hear a case involving the collection of royalties on oil and gas leases in the Gulf of Mexico could cost the United States $19 billion.


The Fort Worth Star-Telegram reports that the Supreme Court decision means the Fifth Circuit ruling will stand, preventing the Interior Department from collecting royalties from Texas-based Anadarko Petroleum Corp.'s offshore leases.


The case centered on the wording of a 1995 law designed to encourage production in the Gulf at a time of low energy prices.


Anadarko, headquartered in The Woodlands, north of Houston, said the royalty waivers applied as long as production stayed under a certain quantity, reports the newspaper. The Interior Department argued that the waivers lasted only as long as energy prices stayed below certain levels.


Adult entertainment taxes OK: And while it's not Texas-based, the case of Pooh Bah Enterprises immediately brought to mind the recent "Texas Pole Tax" legal battles.


Pooh Bah lost in its bid to have an Illinois Supreme Court decision overturned on First Amendment grounds.

The U.S. Supreme Court, however, let stand the state court's ruling on the validity of an amusement tax collected at adult entertainment venues.

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