Bombardier Aerospace Corp. v. United States

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Bombardier operated a fractional-aircraft-ownership program called “Flexjet.” In this appeal, Bombardier claims it is not required to remit federal excise tax on fees collected from participants in Flexjet. The court concluded that the district court's interpretation of 26 U.S.C. 6415(a) is consistent with the statute’s plain language and with authority from this and other circuits; this outcome does place an additional burden on entities already saddled with the responsibility of collecting the tax, but it also prevents unjust enrichment; and it was proper for the district court to dismiss Bombardier’s refund claim. The court also concluded that Bombardier is in possession, command, and control of the means of transportation, and is therefore required to submit section 4261 tax on fees collected from Flexjet participants. The court further concluded that the district court did not err in concluding that the fees collected by Bombardier, including the monthly management fees, are subject to section 4261 excise tax. Finally, the IRS did not violate any duty of clarity it owed to Bombardier, and the unfair competitive disadvantage principle has no application in this case. The district court did not err in denying Bombardier's motion to supplement the complaint. Accordingly, the court affirmed the district court's judgment in the Government's favor. View "Bombardier Aerospace Corp. v. United States" on Justia Law

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