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Read the two cases and make new work like Code Section Rubric and Example PDF and follow the instructions carefully !!!!

Dont exceed one paper (no more than one paper)

So I need three things Code summary, Guidance to Taxpayer, case summery. also dont FORGET to make authority for both cases after the case summery. Agin dont exceed one paper.

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Pennsylvania Sales Tax Guide, Celebrity Parking, Inc. v. Philadelphia Tax Review Board., Commonwealth Court of Pennsylvania, ¶300-325, (Dec. 3, 2002) Click to open document in a browser Celebrity Parking, Inc. v. Philadelphia Tax Review Board. ¶300-325. Commonwealth Court of Pennsylvania, No. 269 C.D. 2002, 270 C.D. 2002 , 2002 Pa Commw LEXIS 1019, 815 A.2d 44, Application for reargument denied February 3, 2003. December 3, 2002. Appeal from the Court of Common Pleas of Philadelphia County. Reversed. Cities—licenses, miscellaneous: Philadelphia parking tax: Persons subject to tax: Valet service.– A valet service was subject to Philadelphia parking tax because it was the operator of two parking facilities where it parked cars, even though it did not own or lease the facilities. The valet service used the parking facilities pursuant to verbal agreements with the lessee and the owner of the facilities, and the evidence established that the valet service controlled the parking facilities. Only its valets moved cars around the lots, and it charged and collected the parking fee from patrons. See ¶230-121. Argued: July 10, 2002 BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE ROCHELLE S. FRIEDMAN, Judge HONORABLE JAMES R. KELLEY, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McGINLEY The City of Philadelphia (City) appeals from the orders of the Court of Common Pleas of Philadelphia County (common pleas court) that reversed the Tax Review Board's (Board) denial of Celebrity Parking, Incorporated's 1 (Celebrity) appeal from the City's parking tax.   Celebrity was assessed and paid the parking tax of 15% of all parking fees collected in 1994 and most of 1995. Subsequently, Celebrity ceased paying the parking tax and sought a refund of moneys paid from the City 2 Department of Revenue and also requested a review of the tax assessments on February 16, 2000.   After a hearing, the Board made the following pertinent findings of fact: 2. Petitioner [Celebrity] operated valet parking operations utilizing several parking lots in Manayunk. There are two separate valet parking operations run by Petitioner [Celebrity], each of which was presented and reviewed separately by the Board. 3. In the first case … Petitioner [Celebrity] provided valet parking by verbal agreement with the Manayunk 3 Development Corporation (MDC)   using a lot leased by MDC by SEPTA. For some of the years in question petitioner [Celebrity] paid the Parking Lot Tax. The refund petition discussed above pertains to these taxes. This valet service operated along Main Street at three locations, specified by MDC, for patrons of Manayunk businesses. MDC specified to Petitioner [Celebrity] the parameters of the valet parking to be provided, meaning the days and hours of operation, expected staffing levels, lots to be used, fee to be charged etc. A patron would drive up to one of the valet locations, which was [sic] indicated by a sign, get out of the car, pay the valet $5.00 and hand him or her the car key. In exchange they would get a ticket, the valet ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 1 would drive the car to the lot, park it safely and retrieve it when the patron returned…. The SEPTA lot was not used by MDC until valet parking could be made available…. MDC was, at all times, responsible for maintenance and any improvements to the lot. Following several incidents of vandalism, MDC also provided some security for the SEPTA lot although the security personnel were not involved with parking the cars in any way. Only Petitioner's [Celebrity's] employees were involved in the valet parking operation. These employees wore uniforms identifying them as employees of Petitioner [Celebrity]. MDC provided some training, primarily focused on customer service, for Petitioner's employees. There were no MDC employees present to do any management, supervision or parking of cars. Petitioner's [Celebrity's] employees collected the $5.00 valet fee. This fee was set by MDC. During the first year of operation, $1.00 of that fee was remitted to MDC. However, sometime in 1995, MDC [sic] stopped remitting the $1.00 per car fee to MDC because this valet parking business was proving to be unprofitable and Petitioner [Celebrity] could not afford to do so. Petitioner's [Celebrity's] employees would take the car from the customer at the valet drop off point and drive it to the lot to be parked. The employees would determine where and how the cars would be parked in the lot. The primary lot on which the cars were parked was leased by MDC from SEPTA. This was an unimproved lot unsuitable for any self-park operation. MDC did not make parking available to the public on this lot in any manner other than through Petitioner's [Celebrity's] valet operation…. If the SEPTA lot being used by the valets became full, they would, on occasion, be able to then valet park additional cars on the lots that were primarily reserved for self-parking. Petitioner [Celebrity] maintained its own insurance for claims of missing items or damage to cars it parked. MDC was responsible for any vandalism at the lot. 4. Petitioner [Celebrity] also provided valet services for the River Deck Café, a Manayunk restaurant…. This valet parking operation was also conducted pursuant to a verbal agreement. The agreement was between Petitioner [Celebrity] and Barry Geften, owner of the River Deck Café and adjacent lot. The agreement was for [P]etitioner [Celebrity] to provide parking for River Deck Café patrons on the adjacent lot. Petitioner [Celebrity] paid a fee of $2000 per month to Mr. Geften for the exclusive use of the lot. Petitioner then charged each parking patron $5.00 to park their car. This lot was for the exclusive use of the patrons of the River Deck Café and the only way to access the lot was through use of the valet. Petitioner [Celebrity] hired and trained valet staff to park the cars and collect the parking fee. Only patrons of the River Deck Café were permitted to park in this lot. Board's Decision, June 12, 2001, Findings of Fact Nos. 2-4; Exhibit 4. The Board concluded: Petitioner [Celebrity] through its employees was engaged in the parking of motor vehicles on lots located in the Manayunk section of the City of Philadelphia. Petitioner [Celebrity] was the owner and manager of the parking operation and engaged in parking transactions for which it collected fees. …. Petitioner's [Celebrity's] position that it was performing a service not subject to the tax and was not operating a parking facility is not supported by the ordinance and pertinent case law. The act of valet parking meets the requirements to subject [Celebrity] to the Parking Tax. Board's Decision, Conclusion of Law No.1 at 4. Celebrity appealed to the common pleas court which reversed and concluded: In the cases before this Court, the facts established that Celebrity provided a valet service; they did not run a parking facility as defined by the Code. The operators of the lots were the entities (the MDC and the River Front Café) which contracted with Celebrity to provide that service. The MDC and the owner of ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 2 the café owned or leased the parking lots in question. They maintained the lots, and provided insurance for any damage sustained by a vehicle while parked on their lot. Neither the MDC nor the café charged Celebrity a parking fee for use of their lots, as their interest was in providing an inexpensive valet service for their patrons. Had they charged Celebrity a fee for the use of their parking lots, they would have been responsible for collecting and paying the tax. (emphasis in original). If there is no parking lot fee, there can be no parking lot fee tax…. Opinion of the Court of Common Pleas, February 21, 2002, at 4. 4 On appeal,   the City's argument is essentially that Celebrity was the “operator” of the SEPTA parking lot and 5 the River Deck Café parking lot and therefore, responsible for the collection and payment of the parking tax.   Section 19-1201(3) of the Philadelphia Code (Code) defines the term “operator” as “[a]ny persons conducting or operating a parking facility.” Section 19-1201(2) of the Code defines the term “parking facility” as “[a]ny outdoor or indoor area or space where more than three (3) motor vehicles may be parked or stored for a charge, fee or other consideration….” A review of the evidence clearly established that Celebrity was the “operator” of the “parking facility” within the meaning of the Code. Here, pursuant to the agreements with MDC and Geffman, Celebrity operated the SEPTA lot and the River Deck Café lot which were outdoor areas where more than three cars could be parked for a charge. Also, it is evident that Celebrity controlled these “parking facilities.” Celebrity's valets parked and returned the cars, only Celebrity's valets moved the cars around in the SEPTA and River Deck Café lots, and 6 only Celebrity charged patrons the five dollar parking fee and collected the fee.   Because Celebrity was the “operator” of the “parking facility”, Celebrity was required under Section 19-1202(1)(b) of the Code to pay the 7 parking tax on these transactions.   Accordingly, we reverse. ORDER AND NOW, this 3rd day of December, 2002, the orders of the Court of Common Pleas of Philadelphia County in the above-captioned matter is reversed. DISSENTING OPINION BY JUDGE FRIEDMAN FILED: December 3, 2002 Because I disagree with the majority's determination that Celebrity Parking, Incorporated (Celebrity) was the “operator” of two parking facilities in the City of Philadelphia (City) and, thus, obligated to collect and pay the City's parking tax, I respectfully dissent. The present case involves two separate verbal agreements governing Celebrity's valet parking operations in the Manayunk area of the City. Under one agreement, between Celebrity and the Manayunk Development Corporation (MDC), Celebrity provided valet parking to patrons of Manayunk businesses utilizing a lot leased by MDC from SEPTA (SEPTA lot). The second agreement was between Celebrity and Barry Geffman, the owner of a Manayunk restaurant named the River Deck Café and the restaurant's adjacent parking lot (River Deck Café lot); in exchange for a monthly payment of $2,000, Geffman granted Celebrity exclusive rights to provide valet service for restaurant patrons on the River Deck Café lot. The valet parking fee in each case was $5.00 per vehicle, paid by the patron to Celebrity. The question here is whether Celebrity was required to collect tax on those fees and pay that tax over to the City. Responsibility for the City's parking tax is set forth in section 19-1202(1)(b) of the Philadelphia Code (Code), (emphases added), which provides, in pertinent part, as follows: ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 3 There is hereby imposed upon every person parking or storing a motor vehicle in or on any parking facility[ 8 9   ] in the City … a tax of fifteen percent (15%) of the amount charged for the transaction,[   ] which tax shall be collected by the operator from the person parking or storing the vehicle, and shall be paid over to the City as provided herein. An “operator” is defined as “[a]ny persons conducting or operating a parking facility.” Section 19-1201(3) of the Code. In determining that Celebrity was responsible for collecting and paying the City's parking tax for both the SEPTA lot and the River Deck Café lot, the majority quotes relevant findings of the Tax Review Board (Board) as well as portions of the conclusions drawn by the Board and the Court of Common Pleas of Philadelphia County (trial court). Without discussing any of these findings or conclusions, the majority then summarily holds that “[a] review of the evidence clearly established that Celebrity was the ‘operator' of the ‘parking facilit[ies]' within the meaning 10 of the Code … pursuant to agreements with MDC and Geffman.”   (Majority op. at 6.) Relying on testimony from Richard DiPiero, Celebrity's owner and president, the majority also finds it “evident that Celebrity ‘controlled' the two parking facilities,” pointing out that “Celebrity's valets parked and returned the cars, only Celebrity's valets moved the cars around in the SEPTA and River Deck Café lots, and only Celebrity charged patrons the five dollar parking fee and collected the fee.” ( Id.) Although I agree with the majority that “the facts clearly establish that Celebrity clearly engaged in a ‘transaction' … subject to the 15% tax pursuant to Section 19-1202(1)(b) of the Code,” (Majority op. at 8, n.7), I cannot agree with the majority's conclusion that Celebrity's oral agreements with MDC and Geffman made Celebrity the “operator” of the SEPTA lot and the River Deck Café lot and, therefore, liable for collecting and paying that tax. To the contrary, the facts in this case indicate that Celebrity is not the “operator” of either lot. Indeed, the record here shows that MDC and Geffman retained control of all material aspects of their parking facilities when each 11 engaged Celebrity to provide valet service,   and Celebrity's participation did not affect MDC's or Geffman's operation of, and management over, the SEPTA lot or the River Deck Café lot, respectively. Neither MDC nor Geffman ever forfeited such control through the terms of their valet service contracts with Celebrity. To the contrary, the Board made findings, ignored completely in the majority's analysis here, indicating that MDC and Geffman maintained control of the facilities by establishing hours of operation for the lots, setting 12 the lot parking fee and restricting lot patronage.   In fact, MDC concedes that it relinquished control over the SEPTA lot only after deciding to transfer operational responsibility for all MDC lots to Park America, another valet service. 13   (R.R. at 18a, 96a-101a, 105a-06a, 117a.) Similarly, control of the River Deck Café lot remained with 14 Geffman.   Thus, contrary to the majority's determination, I do not believe that the Board's findings lead to the conclusion that Celebrity was the “operator” of the two parking facilities. Rather, the findings establish merely that Celebrity operated “valet parking operations,” utilizing the two parking facilities “operated” respectively by MDC and Geffman. 15   DiPiero's testimony only reinforces my position. In describing Celebrity's activities, DiPiero conceded that Celebrity controlled staff assignments for the valet parking that was done and acknowledged that Celebrity's employees determined how to park the cars in the lots. However, I stress that control over the valet parking on parking facilities is significantly different from control over the parking facilities themselves. As DiPiero's response indicates, Celebrity's control extended only to its own valet service employees and operations; the testimony does not speak of any control by Celebrity over the actual parking lots. The Code clearly places the burden for collection and payment of the parking tax on the “operator” of the parking “facility,” and, contrary to the majority's determination, I believe that the evidence here establishes that MDC and Geffman, not Celebrity, bear that burden. 16   Thus, like the trial court, I would conclude that MDC and Geffman are the “operators” of the “parking facilities,” and Celebrity is the “person” parking the motor vehicle. Consequently, MDC and Geffman, as “operators” of their respective lots, had the obligation to collect and pay tax on the amount they charged Celebrity to utilize those ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 4 facilities. However, as the trial court pointed out, Celebrity paid nothing to MDC or Geffman in order to use their 17 lots; the only parking fee exchange was between the valet patron and Celebrity.   As a result, the trial court would deny the City any parking tax whatsoever. I cannot accept this position. The failure of MDC and Geffman to collect the parking tax from Celebrity, as required by section 19-1202(1)(b) of the Code, does not relieve them of their tax liability; they remain liable for the tax even though it was not collected. 18   Accordingly, for the reasons stated above, I would affirm the trial court to the extent that it held that Celebrity was not liable for payment of the parking tax. However, to the extent that the trial court may have “granted” Celebrity a refund of the taxes paid, I would reverse. 19   Footnotes 1  2  3  4  5  6  The City imposed a parking tax on two separate parking lots. Celebrity informed the Board that it had not received a response to its refund request at the time of hearing. The Board decided to consider the refund matter so as to preclude Celebrity, the City and the Board from having to revisit this issue at a subsequent hearing. In addition, the City was able to provide a refund denial letter from the City Department of Revenue. (Board's Statement of record, No. 2). MDC, a Pennsylvania nonprofit corporation, is a charitable organization that fosters economic development in the Manayunk section of the City. See Notes of Testimony (N.T.), August 3, 2000, at 68; Reproduced Record (R.R.) at 145a. MDC secured the use of five parking lots in order to meet the parking shortages that patrons who shop and dine in the area experienced. MDC operated four of the five parking lots as self-park lots and charged $5.00 per vehicle. Because the SEPTA lot was unsuitable for self-parking, the lot was used for valet parking. See N.T. at 55-57; R.R. at 132a-34a. When the common pleas court takes no additional evidence on appeal from a Board's decision, this Court's review is limited to a determination of whether constitutional rights were violated, whether an error of law was committed or whether the necessary findings of fact are supported by substantial evidence. Section 754 of the Administrative Agency Law, 2 Pa. C.S. §754. The City raised three issues in its Statement of Questions Involved: 1) whether the parking tax ordinance (Philadelphia Code) applied to Celebrity where it operated two parking facilities, charged people to park in them and collected the parking payments; 2) whether the common pleas court correctly determined that Celebrity's valet parking did not constitute a taxable "parking transaction" under the Philadelphia Code; and 3) whether the common pleas court correctly determined under the Philadelphia Code that Celebrity was not a parking facility "operator." Craig D. Ginsburg (Ginsburg), Deputy City Solicitor, to Richard DiPiero (DiPiero), owner and President of Celebrity: Ginsburg: Now, I just want to understand what happened when a car came up. When a car drives up, the person gets out of the car and takes a ticket from the valet parker? DiPiero: Yes. Ginsburg: And the person gives their keys to the valet parker? DiPiero: Yes. Ginsburg: And the car is taken down to, I guess you said it was the SEPTA lot that was predominantly used? DiPiero: Correct. Ginsburg: Did the person pay that … the time— DiPiero: Yes. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 5 Ginsburg: —the patron paid the five dollars up front? DiPiero: Yes. Ginsburg: And what was your understanding as to what you were agreeing to do for that five dollar charge? Was it your understanding that you were going to take the car to the lot obviously? DiPiero: Mm-hmm. Ginsburg: Correct? And you're going to keep the car there safely? DiPiero: Correct. Ginsburg: That was all for the five dollars? DiPiero: Yes. Ginsburg: And you're also going to bring the car back to that valet location? DiPiero: Yes. …. Ginsburg: So each valet parking person drove the car on of [sic] his or her own and had automatic access to the lot? DiPiero: Yes. …. William J. O'Brien (O'Brien), Attorney for Celebrity, to DiPiero: O'Brien: Mr. DiPiero, now I want to direct the focus of these questions to what the City has identified as lot number two, which is the appeal that was filed on your behalf for the valet services provided to the River Deck Café. Did you pay a fee to the owner of the lot to valet cars for his exclusive use? DiPiero: Yes. O'Brien: And no customers to any other establishment just for his restaurant? DiPiero: Correct. …. O'Brien: Was it [lot] adjacent to the restaurant? DiPiero: Yes. O'Brien: Why was the valet service necessary if it was adjacent to the restaurant? DiPiero: Because it was a very small lot, and it was just an effort on his part to pack it in, if you will, as many cars as he could on the lot. O'Brien: And what did you pay Mr. Geffman each month? DiPiero: $2,000. Ginsburg to DiPiero: Ginsburg: Did you have control over the valet parking that was done? DiPiero: In terms of assigning staff, yes. Ginsburg: Did you decide how to park the cars in the lot, you meaning Celebrity? DiPiero: Essentially…. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 6 Notes of Testimony, August 3, 2000, at 36-38 and 99-101; Reproduced Record at 113a-15a and 176a-78a. 7  Section 19-1202(109b) of the Code provides: There is hereby imposed upon every person parking or storing a motor vehicle in or on any parking facility in the City on July 1, 1989 and thereafter, a tax of fifteen percent (15%) of the amount charged for the transaction, which tax shall be collected by the operator from the person parking or storing the vehicle, and shall be paid over to the City as provided herein. 8  9  10  11  12  13  As noted, the facts clearly establish that Celebrity clearly engaged in a "transaction" and therefore was subject to the 15% tax pursuant to Section 19-1202(1)(b) of the Code. A "parking facility" is "[a]ny outdoor or indoor area or space where more than three (3) motor vehicles may be parked or stored for a charge, fee or other consideration…." Section 19-1201(2) of the Code. The parties here agree that both the SEPTA lot and the River Deck Café lot are "parking facilities" under this Code section. A "transaction" is the "act of parking or storing a motor vehicle in or on a parking facility in the City, for a financial consideration, or its equivalent, under an express or implied contract." Section 19-1201(4) of the Code. Because a fee is being charged for the parking of motor vehicles on parking facilities in the City, Celebrity's valet service constitutes a taxable parking "transaction" within the meaning of this Code section. In making this statement, the majority ignores the fact that the trial court considered the evidence presented before the Board and, based on that evidence, determined that MDC and Geffman "operated" the SEPTA lot and the River Deck Café lot, respectively, whereas Celebrity merely was the "person parking the vehicle." Although concluding that MDC and Geffman were the lot "operators" responsible for payment of taxes on fees collected for use of their parking facilities, the trial court went on to hold that, because neither MDC nor Geffman charged Celebrity a fee for the use of the lots, the City was not owed parking tax from any of the entities involved. In the case of the SEPTA lot, hiring Celebrity was an economic development tool, enabling MDC to introduce valet service without bearing the expense or liability connected with this service. As to the River Deck Café lot, the record indicates that Geffman only engaged Celebrity to provide valet service to achieve the maximum capacity for the restaurant lot. As the Board found with respect to the SEPTA lot, Celebrity provided the valet service only to patrons of Manayunk businesses and operated at locations specified by MDC. Moreover, MDC specified to Celebrity the parameters of the valet parking to be provided, meaning the days and hours of operation, expected staffing levels, lots to be used and fee to be charged. In fact, Celebrity sought permission from MDC to raise the $5.00 fee, but MDC consistently rejected Celebrity's requests. ( See R.R. at 28a, 31a, 41a, 104a, 124a.) In addition, MDC provided customer service training for Celebrity employees. MDC also accepted responsibility for damages involving theft and vandalism to cars parked on the SEPTA lot, and MDC placed security personnel at the lot to cut back on such costs. (R.R. at 18a, 96a-101a, 105a-06a, 117a.) The only part of the process that MDC did not control were the valet service aspects, i.e., the transporting of cars between the valet locations and the SEPTA lot and the parking of the cars on the lot. (R.R. at 115a, 117a, 125a-26a, 163a-64a, 169a-70a.) At all times, MDC managed the SEPTA lot and was responsible for maintenance on, and improvements to, that lot. (R.R. at 23a-24a, 140a, 144a; see Board's Findings of Fact, No. 3.) Further, without involving Celebrity, MDC started using the SEPTA lot for daytime MDC employee parking during the period in question, and MDC leased a structure on the SEPTA lot to a motorcycle repair shop. (R.R. at 141a-42a, 144a, 170a.) After MDC acquired the lease for the SEPTA lot, several management groups approached MDC about the possibility of using outside management for MDC's lots. However, MDC's parking committee decided that MDC would continue to manage all the lots itself, controlling them and their maintenance. (MDC Board Meeting Minutes, R.R. at 12a.) MDC changed its position in the fall of 1996, when ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 7 14  15  16  17  18  19  MDC discontinued using Celebrity to provide valet service for the SEPTA lot and placed control and management over all of MDC's lots in the hands of Park America. (R.R. at 60a, 104a, 128a-31a, 154a-55a, 160a-61a, 168a.) As to Celebrity's valet services for the River Deck Café, Geffman determined the valet schedule; Celebrity was allowed to park cars only for patrons of the River Deck Café, and the lot was available to Celebrity only during restaurant hours. When the lot was open, Celebrity controlled staff assignments, and Celebrity employees determined car placement. ( See Board's Findings of Fact, No. 4; R.R. at 176a-79a.) Indeed the Board specifically found that "Petitioner [Celebrity] operated valet parking operations utilizing several parking lots in Manayunk." (Board's Findings of Fact, No. 2.) I have not lost sight of the fact that Celebrity was the only entity collecting a fee for the parking transaction; however, collection of a parking transaction fee does not transform Celebrity into an operator of the parking lot. Obviously, the Code did not envision a situation such as the one now confronting us, where the parking facility operator does not collect the transaction fee and the fee collector does not operate the lot. Compare City of Philadelphia v. OLS Hotel Partners, L.P., t/a The Four Seasons Hotel Philadelphia, 781 A.2d 268 (Pa. Cmwlth. 2001). Although Geffman collects $2,000 each month from Celebrity for the exclusive right to conduct valet parking of cars belonging to the customers of the River Deck Café, this is not a taxable parking "transaction" as intended under the Code. Celebrity does not pay Geffman for the actual parking spaces; rather, Celebrity pays Geffman only for the right to provide valet services. Moreover, it certainly is not clear that the monthly payment of $2,000 represents or approximates the $5.00 per car parking fee. Compare OLS Hotel. As stated, parking cars for financial consideration is a taxable transaction under the Code. Where Celebrity is the "person" parking the vehicle, the money exchanged in the "transaction" is subject to the parking tax, and the "operator" of the parking facility is charged with collecting the tax from the person parking and turning that money over to the City. Here, the trial court concludes that, if MDC and/or Geffman had collected money from Celebrity for the parking transaction, they would be liable for the tax but that MDC's and Geffman's failure to do so excuses them from paying the City's parking tax at all. However, by reaching this conclusion, the trial court ignores the fact that a parking transaction within the meaning of the Code clearly took place here, thereby requiring that a parking tax be paid to the City and obligating the operator of a parking facility to collect that tax. Although I conclude that Celebrity is not responsible for payment of the parking tax, that does not automatically mean that Celebrity is entitled to a refund of the tax monies already paid to the City. In reversing the Board's decision, the trial court never specifically ruled on Celebrity's refund request; however, because the Board denied the refund to Celebrity, (Board's Statement of Record, No. 4), the trial court's reversal of that decision would grant Celebrity's refund request by implication. To the extent that the trial court's order would grant a refund to Celebrity, I would reverse. As the City points out, Celebrity submitted its refund request on April 10, 2000, well beyond the three-year statute of limitations, and, therefore, the request must be denied as time-barred. I note, however, that this means that the City already has received payment of the parking tax for a portion of the relevant time period; therefore, no further tax payment is due for that period from either MDC or Geffman. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 8
USTC Cases, [68-1 USTC ¶9331], Sofie Eger, Petitioner v. Commissioner of Internal Revenue, Respondent , Losses: Small business stock: Existence of written plan(Apr. 16, 1968), U.S. Court of Appeals, Second Circuit, (Apr. 16, 1968) Click to open document in a browser [68-1 USTC ¶9331]Sofie Eger, Petitioner v. Commissioner of Internal Revenue, Respondent (CA-2), U. S. Court of Appeals, 2nd Circuit, Docket No. 31260, 393 F2d 243, 4/16/68, Reversing and remanding Tax Court, CCH Dec. 28,091(M), T. C. Memo. 1966-192 [1954 Code Sec. 1244] Losses: Small business stock: Existence of written plan.--The Tax Court erroneously held that the taxpayers had failed to prove that small business stock had been issued pursuant to a written plan. The corporate minutes were a sufficient writing to meet the statutory requirements and the taxpayers were entitled to deduct loss on the stock as an ordinary loss. The case is remanded for determination of the Commissioner’s alternative contentions. BACK REFERENCES: 68FED ¶4772.40. Benjamin Tannenbaum, 350 5th Ave., New York, N. Y., for petitioner. Robert J. Campbell, Mitchell Rogovin, Assistant Attorney General, Lee A. Jackson, Harry Baum, Department of Justice, Washington, D. C. 20530, for respondent. * Before FRIENDLY and SMITH, Circuit Judges, and GIGNOUX, District Judge.   SMITH, Circuit Judge: This is a petition to review, pursuant to section 7482 of the Internal Revenue Code of 1954, a decision of the Tax Court, Theodore Tannenwald, Jr., Judge, [CCH Dec. 28,091(M)] T. C. Memo 1966-192, assessing income tax ** liabilities against the petitioner   for the years 1958, 1959 and 1960. The Tax Court held that the taxpayer was not entitled in 1961 to a deduction from regular income for her loss on the sale or exchange of stock issued by 1 Windmill Food Stores of Hewlett, Inc. (herein Hewlett) under section 1244 of the Code.   Since the deduction was held invalid, the net operating loss it was alleged to have created in 1961 could not be carried back to the tax years in issue. We hold that the loss qualified as an ordinary loss under section 1244 and reverse and remand for determination of the Commissioner’s alternative contentions. In 1958, Hewlett was organized. Petitioner was the sole stockholder and paid $40,000 for her 40 shares 2 pursuant to a corporate motion and resolution of March 31, 1959   which provided that on April 6, 1959 the petitioner was to pay $40,000 for 40 shares of Hewlett issued pursuant to section 1244 of the Code. Early in 1961, Hewlett filed a petition in bankruptcy under Chapter XI of the Bankruptcy Act together with a plan of reorganization which was approved by the referee and confirmed. At that point the petitioner was owed $62,000 by Hewlett. Petitioner waived any right to payment she might have under the plan. In March of 1961, petitioner entered into an agreement with Pick ’N Save, Inc., under which the latter agreed to buy and the petitioner agreed to sell her 40 shares in Hewlett. The purchase price was $100,000 plus the value of certain security deposits, other items, and the value of Hewlett’s inventory on the date of closing less credits for certain secured liabilities. All payments on account of the purchase price were to be deposited in escrow for one year after the closing for the purpose of paying any claims of Hewlett’s creditors for moneys due and owing at the day of closing. At closing, the petitioner was to deliver an executed release of all obligations due it from Hewlett. On April 13, the plan of arrangement was confirmed. The next day, Hewlett reaffirmed its obligations to the petitioner on its indebtedness to her, in a resolution which stated that the petitioner would accept as full payment of her claims any sum paid by Pick ’N Save left with the escrowee after the other creditors had been paid. On the same day, petitioner’s sale of stock to Pick ’N Save was closed. After payment of Hewlett’s other creditors, the escrowee had $30,000 left for payment to the petitioner. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 1 Petitioner claims that the $30,000 was received as final payment on Hewlett’s indebtedness to her, that her stock in Hewlett was worthless in 1961, and that she was therefore entitled to a regular loss under 1244 of the Code. The government contends that the stock in question was not 1244 stock so that all she was entitled to was a capital loss. Or, alternatively, if the stock is 1244 stock, the $30,000 received from Pick ’N Save was received for it, so that the regular loss available is only $10,000, and that an unresolved question of fact remains as to the year in which the $10,000 loss was incurred. The Tax Court held for the government, relying on a finding that the stock in question was not 1244 stock. The Tax Court’s holding that the Hewlett stock was not 1244 stock was based upon a factual finding that the stock was not issued pursuant to a written plan as required by the Statute and Regulation 1.1244(c)-1(c). See Bruce v. United States [68-1 USTC ¶9112], (S. D. Tex. 1967); Morgan v. Commissioner [CCH Dec. 28,131], 46 T. C. 878, 888-90 (1966); Spillers v. Commissioner [CCH Dec. 28,653(M)], 26 T. C. M. 1069, 1073-74 (1967); Warner v. Commissioner [CCH Dec. 28,432], 48 T. C. 7 (1967). We disagree. The corporate minutes are a 3 sufficient writing under the circumstances here to meet the requirements of the statute.   The regulations were not adopted until a time subsequent to the stock issue here, and we cannot charge the taxpayer with knowledge of their provisions. The purpose of 1244 was to encourage the formation of small business units found to be socially and economically desirable in spite of the high risk shown by the high percentage of failure of such units in their formative years, by granting favorable tax treatment to losses incurred by investors in the formation of the small business units. At least during the period prior to the adoption of regulations spelling out under the authorization in the statute to promulgate such regulations, the details required of the plan, we think that fidelity to the purpose of the statute calls for liberal application of its language. Here the very formation of the corporation and issue of its stock was expressed to be in conformity with and limited to the conditions required by section 1244, the amount and period of time actually involved were within the statutory limitations, and the contemplated loss occurred. The Commissioner relies on the Tex Court decisions in Shapiro v. Commissioner [CCH Dec. 27,990(M)], 25 T. C. M. 654 (1966); Morgan v. Commissioner, supra; Warner v. Commissioner, supra, and Spillers v. Commissioner, supra. These cases, even if correctly decided, are clearly distinguishable. In Shapiro there was apparently no proof that the stockholder-directors had 1244 in mind or knew of its requirements, nor was there any proof of the value of the property exchanged for the stock in order to establish its basis. Morgan involved two payments into the corporation, one of which failed to qualify because made before any plan was adopted or entered in the minutes, the second because made after the corporate purpose had failed, in order to complete corporate liquidation and hopefully salvage something by 1244 treatment of the deficit, not for the bona fide purchase of stock. In Warner there was no reference to sec. 1244 in the minutes and the plan for stock purchase contemplated periodic stock purchases (over an indefinite period of time which might well extend beyond two years) from a trust whose rate of purchase depended on trust receipts from a percentage of salary payments by and for employees of another corporation. In Spillers there was no reference to sec. 1244 in the corporate minutes concerning the purchase of stock, and a stock voting agreement of the same date contemplated possible future issues, uncertain in time and amount. In Bruce v. United States, supra, the first purchase was prior to the adoption of the minutes relied on, and in none of the resolutions was there any reference to sec. 1244 or its requisites except for one which, as in Morgan, was after dissolution had been determined on and was held not a bona fide purchase. Subsequent to oral argument, the Commissioner has called our attention to the case of Spiegel v. Commissioner, Docket No. 3326-65, [CCH Dec. 28,857] 49 TC --, No. 58, filed February 28, 1968, denying deduction for lack of a written plan. However, there were in that case no corporate minutes referring to the adoption of a sec. 1244 plan, such as existed here, and even then Judge Dawson recognized that the court was “indeed faced with a close question.” The taxpayer complied with the terms and the spirit of the statute as it stood when the stock was issued. There was no attempt to delay election of the form the transaction should take, or create a hedge against the future. The purpose of the plan requirement, to give unequivocal evidence ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 2 of the taxpayer’s commitment to investment in the covered type of small business enterprise, is met here. She is entitled to the benefit of the deduction under the statute. The decision is reversed and remanded to the Tax Court for further proceedings not inconsistent with this opinion. Footnotes *  Of the District Court of Maine, sitting by designation. **  Since the petitioner and her deceased husband filed joint returns, and acted together on all the relevant transactions, we have treated all transactions as if they were solely the petitioner’s. 1  Internal Revenue Code of 1954: Sec. 1244 [as added by Sec. 202, Small Business Tax Revision Act of 1958, P. L. 85-866, 72 Stat. 1606, 1676]. Losses on Small Business Stock. (a) General Rule.--In the case of an individual, a loss on section 1244 stock issued to such individual or to a partnership which would (but for this section) be treated as a loss from the sale or exchange of a capital asset shall, to the extent provided in this section, be treated as a loss from the sale or exchange of an asset which is not a capital asset. (b) Maximum Amount for Any Taxable Year.--For any taxable year the aggregate amount treated by the taxpayer by reason of this section as a loss from the sale or exchange of an asset which is not a capital asset shall not exceed-(1) $25,000, or (2) $50,000, in the case of a husband and wife filing a joint return for such year under section 6013. (c) Section 1244 Stock Defined.-(1) In general.--For purposes of this section, the term “section 1244 stock” means common stock in a domestic corporation if-(A) such corporation adopted a plan after June 30, 1958, to offer such stock for a period (ending not later than two years after the date such plan was adopted) specified in the plan, (B) at the time such plan was adopted, such corporation was a small business corporation, (C) at the time such plan was adopted, no portion of a prior offering was outstanding, (D) such stock was issued by such corporation, pursuant to such plan, for money or other property (other than stock and securities), and (E) such corporation, during the period of its 5 most recent taxable years ending before the date the loss on such stock is sustained (or if such corporation has not been in existence for 5 taxable years ending before such date, during the period of its taxable years ending before such date, or if such corporation has not been in existence for one taxable year ending before such date, during the period such corporation has been in existence before such date), derived more than 50 percent of its aggregate gross receipts from sources other than royalties, rents, dividends, interest, annuities, and sales or exchanges of stock or securities (gross receipts from such sales or exchanges being taken into account for purposes of this subparagraph only to the extent of gains therefrom); except that this subparagraph shall not apply with respect to any corporation if, for the period referred to, the amount of the deductions allowed by this chapter (other than by sections 172, 242, 243, 244, and 245) exceed the amount of gross income. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 3 Such term does not include stock if issued (pursuant to the plan referred to in subparagraph (A)) after a subsequent offering of stock has been made by the corporation. (2) Small business corporation defined.--For purposes of this section, a corporation shall be treated as a small business corporation if at the time of the adoption of the plan-(A) the sum of-(i) the aggregate amount which may be offered under the plan, plus (ii) the aggregate amount of money and other property (taken into account in an amount, as of the time received by the corporation, equal to the adjusted basis to the corporation of such property for determining gain, reduced by any liabilities to which the property was subject or which were assumed by the corporation at such time) received by the corporation after June 30, 1958, for stock, as a contribution to capital, and as paid-in surplus does not exceed $500,000; and (B) the sum of-(i) the aggregate amount which may be offered under the plan, plus (ii) the equity of the corporation (determined on the date of the adoption of the plan), does not exceed $1,000,000. For purposes of subparagraph (B), the equity capital of a corporation is the sum of its money and other property (in an amount equal to the adjusted basis of such property for determining gain), less the amount of indebtedness (other than indebtedness to shareholders). (d) Special Rules.-(1) Limitations on amount of ordinary loss.-(A) Contributions of property having basis in excess of value.-If-(i) section 1244 stock was issued in exchange for property, (ii) the basis of such stock in the hands of the taxpayer is determined by reference to the basis in his hands of such property, and (iii) the adjusted basis (for determining loss) of such property immediately before the exchange exceeded its fair market value at such time, then in computing the amount of the loss on such stock for purposes of this section the basis of such stock shall be reduced by an amount equal to the excess described in clause (iii). (B) Increases in basis.--In computing the amount of the loss on stock for purposes of this section, any increase in the basis of such stock (through contributions to the capital of the corporation, or otherwise) shall be treated as allocable to stock which is not section 1244 stock. (2) Recapitalizations, changes in name, etc.--To the extent provided in regulations prescribed by the Secretary or his delegate, common stock in a corporation, the basis of which (in the hands of a taxpayer) is determined in whole or in part by reference to the basis in his hands of stock in such corporation which meets the requirements of subsection (c)(1) (other than subparagraph (E) thereof), or which is received in a reorganization described in section 368(a)(1)(F) in exchange for stock which meets such requirements, shall be treated as meeting such requirements. For purposes of paragraphs (1)(E) and (2) (A) or subsection (c), a successor corporation in a reorganization described in section 368(a)(1)(F) shall be treated as the same corporation as its predecessor. ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 4 (3) Relationship to net operating loss deduction.--For purposes of section 172 (relating to the net operating loss deduction), any amount of loss treated by reason of this section as a loss from the sale or exchange of an asset which is not a capital asset shall be treated as attributable to a trade or business of the taxpayer. (4) Individual defined.--For purposes of this section, the term “individual” does not include a trust or estate. (e) Regulations.--The Secretary or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of this section. 2  The Tax Court found The minutes of the first meeting of the Board of Directors of Hewlett, held on March 31, 1959, were on a standard form with blank spaces designed to be filled with the missing details. They contained the following: The Secretary then presented to the meeting a written proposal from Fred Eger and Sofie Eger to this Corporation. Upon motion duly made, seconded and carried, the said proposal was ordered filed with the Secretary, and he was requested to spread the same at length upon the minutes, said proposal being as follows: That Fred and Sofie Eger will purchase stock of the Windmill Food Stores of Hewlett, Inc. and that they will do so provided that the said common stock is issued pursuant to the terms and provisions of Section 1244 of the Internal Revenue Code. Upon motion duly made and seconded and carried it was Resolved that the corporation accepts the offer and conditions of the offer of Fred and Sofie Eger to purchase common stock of the corporation and that it be issued pursuant to Section 1244 of the Internal Revenue Code. [Emphasis added.] The italicized portion was from the form and the non-italicized portion was typed in. 3  Compare the sufficiency of corporate minutes to satisfy the written memorandum requirements of the Statute of Frauds, 2 Corbin Contracts, Sec. 508. Lamkin v. Baldwin & Lamkin Mfg. Co., 72 Conn. 57, 43 A. 593, 596 (1899); Preis v. Eversharp Inc., 154 F. Supp. 98 (E. D. N. Y. 1957). ©2016 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 5

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