Case Summaries

Tax Law

[06/23] In re McKinney
An appeal by a tax debt owner in Chapter 13 proceedings, arising from the bankruptcy court's denial of its objections to the debtor's proposed plan to pay off the tax debt with interest within five years, is dismissed for lack of jurisdiction as, although the issue that the tax debt owner cares about may have been resolved, its basic dispute with the bankruptcy estate has not been resolved and therefore the judgment of the bankruptcy court is not final.

[06/22] In re: Delta Airlines, Inc.
In creditors' appeal from a bankruptcy court's order upholding debtor's objections to their claims under tax indemnification agreements, the order is vacated where: 1) the bankruptcy court's construction of "pay" as that term was used in an agreement at issue nullified debtor's obligation to pay the "Owner Participant" under the agreement upon the occurrence most likely to call its provisions into play ? the debtor's insolvency; and 2) the bankruptcy court effectively nullified the agreements by stripping them of their ability to protect the Owner Participant in the event of debtor's default.

[06/21] US v. Batson
In a prosecution for conspiracy to commit tax fraud, defendant's restitution order is affirmed in part where the district court was authorized to order restitution for a violation of Title 26 as a condition of supervised release by 18 U.S.C. section 3563(b)(2), which granted courts broad discretion to order restitution as a condition of probation, and 18 U.S.C. section 3583(d), which made that grant applicable to supervised release. However, the order is vacated in part where restitution so ordered must be limited to the offense of conviction when, as here, that offense does not involve an element of a "scheme, conspiracy, or pattern of criminal activity."

[06/17] Estate of Schneider v. Finmann
In a legal malpractice action alleging that defendants negligently advised decedent to transfer, or failed to advise decedent not to transfer, an insurance policy which resulted in an increased estate tax liability, the appellate division's affirmance of dismissal of the action is reversed where an attorney may be held liable for damages resulting from negligent representation in estate tax planning that causes enhanced estate tax liability.

[06/17] Estate of Charania v. Shulman
In a tax deficiency case, the judgment of the tax court is affirmed in part and reversed in part where: 1) the tax court's judgment that all of the Citigroup shares were the separate property of the decedent for federal estate tax purposes and, thus, were includable in his gross taxable estate is affirmed, as the rule of De Nicols is that a change in marital domicile does not, in itself, effect a change in the marital property regime governing the spouses' rights in personal property acquired throughout the course of the marriage; but 2) the tax court's approbation of the late-filing penalty was in error and is therefore reversed.

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