Kowalchik v. Brohl, 2012COA25 (February 2, 2012)

Interlocutory appeals under the new Appellate Rule 4.2 are hard to get, but this conservation easement tax credit appeal adds substance to the rule.  Plaintiffs appealed a Dept. of Revenue disallowance of a tax credit to the trial court. The appeals court granted interlocutory review of the trial court’s order denying DOR relief. The court gave 4 reasons for granting interlocutory review under the “controlling issues of law” prong: 1) widespread public interest; 2) failure to join parties can be dispositive; 3) resolution would control the ultimate outcome; and 4) to avoid inconsistent results. The court will review the merits of 4 issues related to conservation easements: 1) who is a “taxpayer;” 2) who is liable for tax deficiencies; 3) are tax credit transferees necessary parties to a tax credit appeal; and 4) what are the service requirements on transferees.




1 Comment

Filed under Interlocutory Review

One response to “Kowalchik v. Brohl, 2012COA25 (February 2, 2012)

  1. The Court of Appeals entered its opinion on the merits in case number 2012 COA 49 (March 15, 2012). Addressing issue number 3 first, It held that due process does not require joinder of transferees in litigation where the transferee is represented by its representative. Second, it addressed issue 4, and held that mailing notice of the proceeding to all transferees and allowing the action to proceed without service of a summons and complaint on each transferee who chooses not to intervene satisfies due process. Finally, the appeals court held that a transferee is a “taxpayer,” subject to deficiencies, interest, and penalties.


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