Urso v. U.S., Nos. 95-1282

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtBefore CUMMINGS, WOOD, Jr., and EASTERBROOK; EASTERBROOK
Citation72 F.3d 59
Parties-8017 Dominick URSO, et al., Plaintiffs-Appellees, Cross-Appellants, v. UNITED STATES of America, Defendant-Appellant, Cross-Appellee.
Decision Date02 January 1996
Docket Number95-1387,Nos. 95-1282

Page 59

72 F.3d 59
76 A.F.T.R.2d 95-8017
Dominick URSO, et al., Plaintiffs-Appellees, Cross-Appellants,
v.
UNITED STATES of America, Defendant-Appellant, Cross-Appellee.
Nos. 95-1282, 95-1387.
United States Court of Appeals,
Seventh Circuit.
Argued Nov. 9, 1995.
Decided Dec. 14, 1995.
Rehearing Denied Jan. 2, 1996.

Page 60

Joseph A. Longo (argued), Mt. Prospect, IL, for Plaintiffs-Appellees in both cases.

Gary R. Allen, Kenneth L. Greene, William J. Patton (argued) Department of Justice, Tax Division, Appellate Section, Washington, DC, for Defendant-Appellant in No. 95-1282.

Gary R. Allen, Kenneth L. Greene, William J. Patton (argued), Department of Justice, Tax Division, Appellate Section, Washington, DC, Eugene J. Rossi, Barbara E. Seaman, Department of Justice Tax Division, Appellate Section, Washington, DC, Thomas P. Walsh, Office of the United States Attorney, Civil Div., Chicago, IL, for Defendant-Appellee in No. 95-1387.

Before CUMMINGS, WOOD, Jr., and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

Dominick Urso and his wife Leonarda Urso operate a landscaping business through their corporation, Dominick Urso Landscaping. Separate audits of the Ursos and their corporation--conducted by different auditors--reached inconsistent conclusions about the proper tax treatment of their financial affairs. Extended administrative proceedings, followed by this suit seeking a refund, resolved most issues in favor of the corporation, and the Commissioner accepts that decision. Now the inconsistency has been reversed. For example, the corporation was allowed to treat a $24,000 payment to the Ursos as an ordinary and necessary business expense, but the Ursos have not reported the transfer as income or paid tax on it. The IRS believes that it is entitled to collect and filed a counterclaim; the Ursos disagree, and the jury backed them up. Their theory is that a post-audit examination of their returns for 1984 and 1985 created a binding contract, closing those tax years to all further dispute; and the fact that they failed to inform the examiner about the $24,000 payment is just a tough break for the collectors of the revenue, which the IRS could have avoided by assigning the individual and corporate returns to a single person. The dispute as it comes here also entails fraud penalties and other items that the Ursos say were extinguished by a form the examiner signed memorializing her conclusions.

Before, during, and after the trial, the IRS insisted that the examiner lacked authority to make a promise binding the United States. That power is reposed in the Secretary of the Treasury, 26 U.S.C. Secs. 7121, 7122, who has delegated it to several classes of employees--all superior in the bureaucratic hierarchy to examiners. See Delegation Order No. 11 (Rev.19), 1989-38 I.R.B. 4; Delegation Order No. 97 (Rev. 31), 1992-2 C.B. 357. Apparently the district judge thought that the scope of an examiner's authority is a question to be resolved at trial, in light of the parties' dispute. Yet the meaning of a regulation is a question of law for the court, not of fact for the jury. Bammerlin v. Navistar International Transportation Corp., 30 F.3d 898, 900-01 (7th Cir.1994).

An examiner just can't compromise a tax claim or close a tax year to further examination. An examiner may approve a refund (as this one did), and any examiner who does so...

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38 practice notes
  • Lust v. Sealy, Inc., No. 02-C-50-C.
    • United States
    • United States District Courts. 7th Circuit. Western District of Wisconsin
    • August 19, 2003
    ...(7th Cir.1996); Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1139-40 (7th Cir.1994). Defendant's reliance on Urso v. United States, 72 F.3d 59, 61 (7th Cir. 1995), is misplaced. In that case, the defendant moved for judgment as a matter of law under Rule 50 both at the close of the ......
  • A.M. v. Butler, No. 02-2882.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • March 2, 2004
    ...breach of our rules. Sanctions for failure to comply with Rule 30 may include dismissal of the appeal, see, e.g., Urso v. United States, 72 F.3d 59, 61 (7th Cir.1995); Mortell v. Mortell Co., 887 F.2d 1322, 1327 (7th Cir.1989), or imposition of a penalty on the offending lawyer, including a......
  • Petit v. City of Chicago, No. 90 C 4984.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • October 23, 2002
    ...judgment, or otherwise) have made the moving party's position clear for the court and opposing party. Id. at 777-78; Urso v. United States, 72 F.3d 59, 61 (7th Cir.1995). Accord Rankin, 133 F.3d at As to the merits of a Rule 50 motion for judgment as a matter of law, federal law provides th......
  • United States v. Lilly, No. 14–8041.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • January 19, 2016
    ...operation of apparent authority...."). Thus, "unless the agent had actual authority, any agreement is ineffectual." Urso v. United States, 72 F.3d 59, 60 (7th Cir.1995)."Actual authority incorporates the concepts of express and implied authority." Proctor & Gamble Co. v. Haugen, 222 F.3d 12......
  • Request a trial to view additional results
38 cases
  • Lust v. Sealy, Inc., No. 02-C-50-C.
    • United States
    • United States District Courts. 7th Circuit. Western District of Wisconsin
    • August 19, 2003
    ...(7th Cir.1996); Downes v. Volkswagen of America, Inc., 41 F.3d 1132, 1139-40 (7th Cir.1994). Defendant's reliance on Urso v. United States, 72 F.3d 59, 61 (7th Cir. 1995), is misplaced. In that case, the defendant moved for judgment as a matter of law under Rule 50 both at the close of the ......
  • A.M. v. Butler, No. 02-2882.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • March 2, 2004
    ...breach of our rules. Sanctions for failure to comply with Rule 30 may include dismissal of the appeal, see, e.g., Urso v. United States, 72 F.3d 59, 61 (7th Cir.1995); Mortell v. Mortell Co., 887 F.2d 1322, 1327 (7th Cir.1989), or imposition of a penalty on the offending lawyer, including a......
  • Petit v. City of Chicago, No. 90 C 4984.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • October 23, 2002
    ...judgment, or otherwise) have made the moving party's position clear for the court and opposing party. Id. at 777-78; Urso v. United States, 72 F.3d 59, 61 (7th Cir.1995). Accord Rankin, 133 F.3d at As to the merits of a Rule 50 motion for judgment as a matter of law, federal law provides th......
  • United States v. Lilly, No. 14–8041.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • January 19, 2016
    ...operation of apparent authority...."). Thus, "unless the agent had actual authority, any agreement is ineffectual." Urso v. United States, 72 F.3d 59, 60 (7th Cir.1995)."Actual authority incorporates the concepts of express and implied authority." Proctor & Gamble Co. v. Haugen, 222 F.3d 12......
  • Request a trial to view additional results

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