Judge Thomas Ambro held the appellants/petitioners stated no cause of action against the Virgin Islands in the district court and in the alternative the Virgin Islands had taken no administrative action against the appellants/petitioners regarding the 2006 tax year and so a claim was not ripe.
The appellants/petitioners, Harvey and Diane Birdman and Herbert and Bonita Hirsch, formed Virgin Island corporations that were among the limited partners in a Virgin Islands limited liability partnership. Both couples asserted they were not bona fide residents of the Virgin Islands in 2006 but claimed part of their income was derived from sources within the Virgin Islands under Internal Revenue Code Section 932. Both couples filed two tax returns: one with the United States and one with the Virgin Islands. But the couples each only made one payment.
The lawsuit asked the Virgin Islands to declare whether the income in question was derived from sources within the Virgin Islands. Against the U.S., the couples requested refunds of the amounts they claimed should be paid to the Virgin Islands.
OPINION OF THE COURT
These consolidated cases stem from a single lawsuit by two married couples and their affiliated entities. They sued the Virgin Islands and its tax agency seeking a determination of the source of certain income, and the United States seeking tax refunds. The United States District Court of the Virgin Islands (the “V. I. District Court” or simply the “District Court”) dismissed their claim against the Virgin Islands and transferred their claims against the United States to the United States District Court for the Southern District of Florida. The plaintiffs have directly appealed the District Court's dismissal of their claim against the Virgin Islands, and they have filed a petition for a writ of mandamus concerning their claims against the United States.1 For the reasons that follow, we affirm the holding of the District Court and deny the mandamus petition.
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