Tax Court

The Maryland Tax Court has frequently failed to rule on residential property assessment cases as promptly as the law requires, according to a state audit made public Thursday. The court, which hears appeals in cases involving state and local taxes, must hear and decide residential property assessment cases within 90 days. But 41 percent of the cases heard between July 2010 and mid-February took longer - as much as a year past the 90-day point, the Office of Legislative Audits said.

The Maryland Tax Court has frequently failed to rule on residential property assessment cases as promptly as the law requires, according to a state audit made public Thursday. The court, which hears appeals in cases involving state and local taxes, must hear and decide residential property assessment cases within 90 days. But 41 percent of the cases heard between July 2010 and mid-February took longer - as much as a year past the 90-day point, the Office of Legislative Audits said.

The federal tax court has ruled in favor of the Internal Revenue Service in a 14-year-old evasion case involving a now-dead lawyer who was one of the nation's leading tax advisers, millions of dollars in reported real estate kickbacks and a Supreme Court ruling that ended a long-standing practice of secrecy in tax court. And if that is not enough, it is probably not over. In the decision last week, Judge Harry A. Haines of the U.S. Tax Court ruled that the lawyer, Burton W. Kanter, and two associates had accepted kickbacks from the Pritzker family of Chicago, which owns the Hyatt hotels, and then evaded taxes on the payments.

Key to the Columbia Association's wholesale revision of its "People's Plan" for Symphony Woods - i.e., the plan developed collaboratively by renowned architects, residents and CA Board and staff   - is a proposed "Symphony Woods Trust. " At CA's meeting on Jan. 31, I was surprised to learn that this entity would not actually be a "Trust. "  Rather, it would be a non-stock corporation, which will apply for IRS designation as a 501(c)(3) charitable organization. In 1984, CA's application to the IRS for 501(c)

Hoping to revive a lawsuit filed by developers and homeowners seeking to claim fees that developers paid to Anne Arundel County, a lawyer for the property owners told appellate judges yesterday that the county's position on how his clients should seek the money is illegal and unworkable. An attorney for the county countered that a Circuit Court judge was right to dismiss the lawsuit because state law provides a framework for disgruntled property owners who are trying to recoup impact fees of several thousand dollars per house.

As your prepare your 1991 income tax returns, be careful how you treat that condo at Ocean City or Deep Creek Lake. Here are some tips for preparing tax returns on rental property.Losses generated from rental property are normally deductible, though they are limited by various phaseout and carry-over provisions. However, losses derived from renting a vacation home are subject to additional restrictions.A vacation home is rental property that has been used by the taxpayer for personal purposes for more than 14 days during the tax year or more than 10 percent of the number of days the home is rented at a fair rental value, whichever is greater.

A Maryland Tax Court judge ruled yesterday that The EnterTRAINment Line must pay at least $300,000 in overdue taxes, interest and penalties to Union Bridge and Westminster because it did not pay admissions and amusement taxes for a four-year period.The decision could close the business, the company president said after the all-day hearing in Tax Court in Baltimore."It could cause our demise, but not immediately," President Donald S. Golec said. "We're going to be here a while."He said he did not know if the company, Gus Novotny Associates Inc. of Union Bridge, will appeal yesterday's decision to Carroll County Circuit Court.

Clyde's, which operates restaurants in Chevy Chase and Columbia, should not be required to pay Maryland's admissions and amusement tax on gross receipts, the Court of Special Appeals said yesterday. Music played there is mostly for ambience, and the restaurant does not rely on a cover charge or additional food and beverage sales to pay for the entertainment, the court held in a 2-1 decision. The ruling came in a failed appeal by the state comptroller's office, which also lost bids in Tax Court and Baltimore City Circuit Court to collect the taxes from the Washington-area restaurant chain.

WASHINGTON -- The Supreme Court agreed yesterday to resolve an escalating legal dispute over what requirements taxpayers who do some of their work at home must meet to qualify for a home-office deduction.The question, which the justices will not decide until next year, pits the U.S. Tax Court against the Internal Revenue Service. The IRS has long regarded home-office deductions with suspicion as an area of abuse.Two years ago, Tax Court judges rejected the IRS position and adopted a taxpayer-friendly interpretation of the relevant provision of the Internal Revenue Code.

Like most downtown office building owners hurt by the real estate industry's depression, Ray Turchi thought the state's assessment of the 23-story Redwood Tower in 1992 far exceeded its true value.At issue was money -- lots of it, since the assessment would determine the tax bill for the building at 217 E. Redwood St."Our feeling was the building should have been assessed at what we paid for it, and it wasn't," said Mr. Turchi, who with Angelo Teeter bought the property for $10.5 million in June 1992.

Suzanne Ruth Sherwood, the first woman appointed to the Maryland Tax Court, died Thursday at Roland Park Place. She was 85. "In her understated way, my aunt was an early feminist before that word came into existence," said Mrs. Sherwood's niece, Laure Ruth. "She enjoyed being a lawyer, but neither she nor her husband chose the traditional route of joining a law firm, becoming partner and making a lot of money," Ms. Ruth said. "Much of what she did was pro bono. She dedicated her life to public service and charitable works and helping others.

A Maryland court has ordered clothing retailer Talbots Inc. to pay $1.1 million in back state income tax, the latest victory in a long-standing campaign by Maryland to crack down on companies that avoid paying taxes by setting up Delaware holding corporations. The Maryland Tax Court ruled that Talbots owed the money for income taxes from 1993 to 2003. Talbots set up a subsidiary in Delaware called Classics Chicago to reduce its corporate income taxes. "The vast majority of Maryland businesses are playing by the rules, and we will not allow a few large corporations to gain an unfair competitive advantage by flouting our tax laws," Comptroller Peter Franchot said yesterday.

The federal tax court has ruled in favor of the Internal Revenue Service in a 14-year-old evasion case involving a now-dead lawyer who was one of the nation's leading tax advisers, millions of dollars in reported real estate kickbacks and a Supreme Court ruling that ended a long-standing practice of secrecy in tax court. And if that is not enough, it is probably not over. In the decision last week, Judge Harry A. Haines of the U.S. Tax Court ruled that the lawyer, Burton W. Kanter, and two associates had accepted kickbacks from the Pritzker family of Chicago, which owns the Hyatt hotels, and then evaded taxes on the payments.

Tribune Co. expressed cautious optimism yesterday that it would succeed in overturning a tax ruling costing the company $1 billion, even as its stock price fell to its lowest level in nearly four years. Still, executives pledged to immediately pay the back taxes and interest to the Internal Revenue Service stemming from two transactions carried out by the former Times Mirror Co., before its takeover by Tribune in 2000. As the stock slid by more than 4 percent yesterday to its lowest level since November 2001, Tribune said the payment won't require the sale of assets because $250 million had been set aside and additional money was raised last month through bond financing.

Four wireless phone companies have filed lawsuits in Maryland Tax Court against the city, requesting a refund of millions of dollars in taxes paid on wireless services sold to Baltimore customers. T-Mobile, Verizon Wireless, Sprint and Cingular Wireless contend in their lawsuits that the city Department of Finance has no authority to collect the $3.50 monthly tax per customer. They say the tax might illegally apply to services outside city boundaries when cell phone users are on the road and that it amounts to a sales tax, which the city is prohibited from imposing.

Clyde's, which operates restaurants in Chevy Chase and Columbia, should not be required to pay Maryland's admissions and amusement tax on gross receipts, the Court of Special Appeals said yesterday. Music played there is mostly for ambience, and the restaurant does not rely on a cover charge or additional food and beverage sales to pay for the entertainment, the court held in a 2-1 decision. The ruling came in a failed appeal by the state comptroller's office, which also lost bids in Tax Court and Baltimore City Circuit Court to collect the taxes from the Washington-area restaurant chain.

Owners of the EnterTRAINment Line have issued an ultimatum to the Maryland General Assembly: Pass special legislation exempting the company from the admission and amusement tax levied by Westminster and Union Bridge, and forgive a back tax bill of more than $300,000, or we close the business.Clearly, the firm's intent is to force the legislature's hand, although the threat diminishes an already weak argument that the company should not have been taxed in the first place.EnterTRAINment's owners have contended that because their company is a railroad involved in interstate commerce, federal law and regulations prevent local governments from imposing taxes and levies on the business.

WASHINGTON -- A husband-and-wife team with a modest legal practice in Prince George's County handled their own case and beat the federal tax collector yesterday -- in the highest court in the land.With silent support from the Supreme Court, Clayton J. Powell Jr. and Darlene Wright Powell of Mitchellville need only go to the U.S. Tax Court to seal their victory. The Supreme Court turned down flat an appeal by the Internal Revenue Service. As is usual with that kind of action, the justices did not explain.

In a victory for Anne Arundel County, the state's highest court dismissed yesterday a developers' lawsuit seeking millions of dollars in refunds of money and property they gave the government in exchange for exemptions allowing them to build homes in areas where schools and roads were overburdened. The unanimous Court of Appeals ruling ends the prospect of the county being ordered to refund what developers claimed was more than $7 million the county collected over more than a decade in deals they said evaded county laws and nearly amounted to extortion.