Bankruptcy sale of former Husker lineman's trophies nets $28,500. Journal star.com. "A court-ordered auction of former Nebraska football player Aaron Taylor's championship hardware has brought in $28,500. It took about 30 minutes to sell Taylor's seven championship rings and his Outland Trophy on Saturday morning in Scottsbluff. Bids were taken in person and online. The trophy netted the highest bids, selling for $6,800. The rings sold for $2,000 to $5,900. The auction was forced by the failure of the Husker-themed Scarlet and Cream Letter Club restaurant Taylor started in Omaha with other former NU players and his resulting bankruptcy."

Nebraska Supreme Court finds that meatpackers' payments to cleaning companies were subject to sales taxes, reverses Lancaster County District Court that hand found Department of Revenue regulations that required packers to pay the sales taxes went beyond revenue statute § 77-2701.16(4)(a). Swift & Co. v. Nebraska Dept. of Rev., S-08-1095 through S-08-1099, 278 Neb. 763 Specialized cleaning services for meatpackers cleaned all the equipment fixtures, areas of the plants and the packers paid sale taxes on the services. Packers sought refunds and sued in Lancaster County District Court when the Department of Revenue denied their refund claims. The District Court Judge found Reg. 1-098.03A unlawfully expands the definition of services covered by § 77-2701.16(4)(a). Supreme Court, CJ Heavican reverses: "the Department did not exceed the scope of its rule making authority. Although other sections of the statute specifically mention personal property, those situations are distinguishable... also Reg. 1-098.03A contemplates that the cleaning of tangible personal property must be incidental to cleaning the building. As pointed out by the Department, most cleaning contracts contemplate at least some cleaning of personal property located within the building...Therefore..Reg. 1-098.03A did not exceed the Department’s rule making authority and that the taxpayers are not entitled to a refund ."

Nebraska Court of Appeals in an opinion not designated for permanent publication reverses Washington County District Court ruling that gave divorced husband credit for income tax he paid on retirement plan benefits he kept because the parties failed to file a qualified domestic relations order, QDRO, for nearly three years after the court's divorce decree. Sears v. Sears, A-09-378Parties divorced in 2005 and the court ordered a QDRO to deal with the husband's retirement plan. The parties appealed the divorce but did not deal with the retirement assets, so the court's award to the wife of the retirement funds became the law of the case. For nearly three years however without a QDRO the husband continued to receive the full retirement check. Wife sought an accounting for those amounts. Nebraska Court of Appeals rules in her favor and reverses the husband's credit for taxes he paid on the full amount. Blaine v. Blaine, 275 Neb. 87, 744 N.W.2d 444 (2008), holds that an accounting is appropriate to address the monetary balancing required by the delayed entry of a QDRO required by a divorce decree. If and when the judgment is paid, the tax consequences are between the parties and the IRS. To the extent that the record supports a conclusion about taxability, Sonderup‟s testimony was clear that the judgment would not be income to Donna. Accordingly, the award of a credit of $7,458 for husbands income taxes is reversed.

Nebraska Supreme Court reverses accounting malpractice verdict that was against accountant in 1031 exchange dispute. Frank v. Lockwood, S-06-731, 275 Neb. 735 A Western Nebraska businessman sued his accountant after he sold some real estate but decided not to escrow the entire sale amount for a section 1031 exchange for other property. The accountant earlier advised him that he would be able to offset some of his gain from the real estate sales with his corporation's losses. The businessman was not able to offset the real estate sale income. The IRS gave the plaintiff an extension to file his tax return until October at the accountant's request but the accountant failed to advise the businessman to pay estimated taxes by the regular April 15 due date. The businessman incurred substantial penalties and interest because he did not file and pay his return until December, almost 2 months later than the extended due date. The Scotts Bluff County District Court jury awarded the businessman a verdict of $37000, all of his IRS penalties and interest. Nebraska Supreme Court reverses, holding the plaintiff businessman failed to prove that the IRS interest payment damaged him. The plaintiff should have proven that he could not have borrowed the unpaid tax amount at a rate lower than the IRS rate. While the Nebraska Supreme Court upholds the verdict for the IRS penalties, the court sends it back to the District Court to determine and award only for penalties related to failing to pay the taxes. Justice Connolly dissents. Frank v. Lockwood, S-06-731, 275 Neb. 735 The plaintiff's failure to file the return on time is not the accountant's fault. The penalties incurred by the Franks in this case appear to have been of two types—those incurred because the Franks failed to pay taxes when due on April 15, 2002, and those incurred because the Franks failed to file their returns when due as extended to October 15. Under federal law, I.R.C. § 6651 (2000) provides in subsection (a)(1) that a taxpayer may be assessed a penalty for failure to timely file a return and provides in subsection (a)(2) that a taxpayer may be assessed a separate penalty for failure to timely pay taxes due. In addition, I.R.C. § 6654 (2000) provides that penalties may be assessed for underpayment of estimated taxes. Nebraska law provides for similar penalties for failure to timely file returns, Neb. Rev. Stat. § 77-2789 (Reissue 2003), and for underpayment of estimated taxes, 316 Neb. Admin. Code, ch. 20, § 007 (1998). there was sufficient evidence from which the jury could find that L ockwood was negligent in failing to advise the Franks to pay an estimate of their 2001 tax liability on April 15, 2002. the district court did not err in denying L ockwood’s motion for judgment notwithstanding the verdict with respect to any portion of the damages award that was attributable to penalties for the Franks’ failure to timely pay taxes.to the extent such penalties are penalties for failure to timely file returns, under the facts of this case, they are not recoverable as damages. However, to the extent such penalties are penalties for failure to timely pay the taxes, under the facts of this case, they are recoverable as damages. Because the evidence in the record does not allow us to determine what portion of the penalties are for late payment of the taxes which are recoverable, we find it necessary to remand this cause to the district court for a new trial limited to a determination of the portion of damages attributable to penalties imposed for failure to timely pay taxes and, upon a proper showing, awarding the Franks an amount of damages equal to penalties for failure to timely pay taxes.

Nebraska Supreme Court denies Goodyear's claim that the Nebraska Department of Revenue should have created regulations to define what sales tax credits Goodyear could receive for property purchases before the Revenue Department could deny credits to Goodyear under the LB775 business tax incentive programs. Goodyear Tire & Rubber Co. v. State, S-06-1103, 275 Neb. 594The Nebraska Supreme Court denied Goodyear's appeal that it was entitled to credits for sales taxes on some equipment and parts purchases. Goodyear also appealed because the Nebraska Department of Revenue did have have regulations to interpret the disputed sections of the law. The Supreme Court held the Revenue Department did not need the regulations. "In the present case, § 77-4111 requires the Commissioner to adopt and promulgate those rules and regulations, but only those rules that are necessary for carrying out the purposes of L.B. 775. The purpose of L.B. 775 is to “accomplish economic revitalization of Nebraska” and to “encourage new businesses to relocate to Nebraska, retain existing businesses and aid in their expansion, promote the creation and retention of new jobs in Nebraska, and attract and retain investment capital in the State of Nebraska.”We conclude that promulgating rules and regulations regarding interpretation of qualified property is not necessary for carrying out those purposes."

Nebraska Supreme Court agrees that group of relatives who inherited estate property from an expiring QTIP needed to reimburse the estate for estate taxes even though the second decedent who passed on the QTIP property had purported to waive reimbursement in his will. In re Ervin W. Blauhorn Revocable Trust, S-06-531, 275 Neb. 256 Husband and wife who had no children of their own set up a Qualified Terminal Interest Property Trust (QTIP) which would take effect when the first spouse died. When the wife died the widower took over the QTIP property. When he died the beneficiaries of the deceased wife's QTIP objected to paying his estate taxes that became due from the QTIP property. The husband's will purported to waive reimbursement claims, but not specifically for QTIPs. The Hamilton County Court ordered the QTIP beneficiaries to reimburse the estate. Nebraska Supreme Court affirms and holds the waiver was not specific enough to waive the QTIP beneficiaries' reimbursement requirement. Also the Supreme Court agrees that the county court properly admitted the estate attorney's affidavit in which the attorney attested to the total estate tax return and a hypothetcial tax return that excluded the QTIP property. "The language of article X of E rvin’s trust agreement, which was signed after the effective date of the current version of 26 USC § 2207A, indicated that there was to be no right of reimbursement against recipients or beneficiaries. However, we conclude that such was insufficient to waive the trust’s right of reimbursement under that section. A s is detailed above, this is so because there was no reference to § 2207A, or even to the QTIP trust or property, in article X, and thus no language “specifically indicat[ing] an intent to waive any right of recovery under this subchapter” as required by § 2207A. T he county court did not err in ordering the S charvins to reimburse the trust for a portion of the federal estate tax paid by the estate, and the S charvins’ first assignment of error is without merit. Messner, as the attorney who actually completed the federal estate tax return for the estate, was competent to testify to the amount he calculated as being due on that return. In addition, Messner was competent to testify about the alternative calculation he performed wherein he omitted B onnie’s property from the estate.

Order of the Knee pads update: Nebraska Supreme Court denies reinstatement following disbarment over 10 years ago when attorney was convicted of tax evasion and has not completed restitution to the US Government for over $66k nor to the IRS on his total tax liability that was between $300 and $400k. Legal profession blog. "The Nebraska Supreme Court denied an application for reinstatement of a disbarred attorney. The attorney had been suspended for a false representation and then disbarred in 1997 for an income-tax conviction. Counsel for Discipline had opposed reinstatement notwithstanding a favorable referee's finding on present good moral character. The court agreed with Counsel for Discipline, concluding that the underlying conviction (which involved failure to pay taxes over a ten-year period)and his failure to make restitution militated against restoration to practice." State ex rel. Counsel for Dis. v. Scott, S-97-584, 275 Neb. 194 The Nebraska Supreme Court did not consider its reinstatement ruling in Counsel for Discipline v Mills (Mills II) when it reinstated an attorney whom it had suspended for filing false declarations with the IRS in an estate case but in the meantime the US Government had successfully prosecuted for filing the false forms. The Nebraska Supreme Court found a way to let him in.

Nebraska Court of Appeals in memorandum decision affirms alimony order for $2300 monthly for 20 months when Gage County District Court considered husband's personal draws from his business as income.

• Borgman v. Borgman, A-06-949

The husband regularly drew $40 to $50K per year from his incorporated pallet business and counted the draws as a corporate loan that he would repay with bonus salary. The divorce court considered the draws as income when considering its $2300 monthly alimony award to the wife. Even if the court did not factor in these draws when calculating child support the Court of Appeals affirms the alimony award and this reasoning. the “loans” is how the couple handled their money during the marriage, and thus, it would be incongruous for the courts to ignore this additional stream of money which has provided for the parties’ lifestyle and expenses. Steve’s argument appears to be that because the “borrowing and bonus” methodology was not considered for child support purposes it cannot be considered for alimony purposes. No authority is cited for this notion, and while Lisa might have made the opposite argument on appeal for increased child support, she did not. This is not to suggest that such an argument would have been successful, but only that Steve’s argument in this regard ignores the aspects of the court’s treatment of the “borrowing and bonus evidence” that are favorable to him. Accordingly, after consideration of the entire record, we are unable to say that the trial court’s award of alimony is untenable and an abuse of discretion.

Nebraska Supreme Court favors tax deed holder over trust deed purchaser's competing claim.

Ottaco Acceptance, Inc. v. Larkin, A-05-854

A tax certificate holder who takes a tax deed in accordance with Section 77-1837 is the owner of the property and not just a lien holder. The tax certificate holder elected to take a tax deed instead of foreclosing with the certificate. See 77-1902 {procedures to seek judicial foreclosure of the properties subject to tax certificate}. A purchaser from the trust deed holder's auction recorded his deed one day before the tax deed was recorded. Douglas County District Court ruled in favor of the tax deed holder and the Supreme Court affirms. A competing claimant to the property must comply with §§ 77-1843 and 77-1844 to challenge the title of an owner who gained title through a tax deed even if the tax deed holders title is void or voidable. Therefore one challenging the claim under a tax deed must show that he was the owner of the property and the time of the tax deed conveyance; that there were no taxes due; and that the tax deed was defective. Although the Supreme Court agrees that the trust deed buyer could claim title to the property and that the former owner had tendered payment of the taxes to the Douglas County Treasurer, the Court rejects the trust deed buyers claim that the tax deed was defective for not notifying the original owner, for not having a legible seal, and for not following a "formalistic" procedure of taking the original certificate from the County, then giving it back to him.

The IRS audited the former owner of a construction company and the targeted principal alleges he ultimately won the audits, however he alleged that his former partner and the Bennington Bank had conspired to submit false business records to the IRS in order to harm him. The audited partner sued the bank and his former partner but the district Court dismissed on Rule 12b6. Nebraska Supreme court affirms 12b6 dismissal because the Plaintiff's complaint fraud, misrepresentation, and conspiracy apply only when the defendants make the misrepresentations to the Plaintiff and not to third parties. Supreme Court however does not charge the Plaintiff attorney fees because his theory of recovery was "plausible." Brummels v. Tomasek, S-05-1548 brumes set forth four separate claims for relief entitled “Fraud,” “negligent Misrepresentation,” “Fraudulent Concealment,” and “Conspiracy.” brumes alleged, inter alia, that appellees had prepared and submitted false information to the Internal revenue service (IRS), allegedly involving Plaintiff’s misappropriation of funds and unreported income, and that appellees concealed exonerating information from the IRS. Supreme Court concludes that the district court did not err in sustaining appellees’ rule 12(b)(6) motions to dismiss and in dismissing Brummels’ complaint. We further conclude that the district court did not abuse its discretion in denying Tomasek and MJr’s motion for attorney fees. the decisions of the district court are affirmed