In This Issue:
- Maryland’s Tax Scheme Ruled Unconstitutional
- “FTC Generator” Case Update
- FSA Rules that Equitable Disgorgement May be Deductible Expense
- District Court Upholds Attorney Client Privilege and Work Product
- Inadequate Privilege Log Fails to Shield Email from Disclosure
- TIFD III-E (Castle Harbor) Hit With Negligence Penalty
- IRS Issues Guidance under the Codified Economic Substance Doctrine and Related Penalties
- Excerpt from Maryland’s Tax Scheme Ruled Unconstitutional:
On May 18, 2015, the United States Supreme Court in Maryland v. Wynne affirmed a ruling from Maryland’s highest court and held that a Maryland tax scheme that credits residents for taxes paid on out-of-state income at the state income level but not at the county level, violated the dormant Commerce Clause.1 The Court’s 5-4 decision drew strong dissents from Justices Scalia, Thomas, Ginsburg and Kagan. The majority opinion by Justice Alito concluded that Maryland’s tax scheme has the same effect as a state tariff and violates the “internal consistency test,” which considers whether taxpayers would pay taxes at the same rate if every state adopted the same tax scheme.
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