Taxes

Federal Judge Rules V.I. Attorney General Can Appoint Outside Counsel in $12.9 Million Ocwen Tax Fight

A federal magistrate judge has ruled that the V.I. Attorney General has common-law authority to appoint private attorneys as special assistant attorneys general, rejecting a challenge brought by Ocwen USVI Services LLC in a tax dispute involving nearly $13 million in contested assessments. In a 25-page opinion issued October 3, U.S. Magistrate Judge G. Alan Teague denied Ocwen’s motion to disqualify attorney James N. Mastracchio from serving as co-counsel for the director of the V.I. Bureau of Internal Revenue. The ruling does not decide the underlying tax dispute. Ocwen is challenging a VIBIR determination that it owes $12,948,684 in income taxes for the 2019 tax year. The company disputes the entire deficiency and contends that, instead of owing the government money, it is entitled to a $1,348,518 refund. The October 3 decision instead resolves a significant question over who may represent the Virgin Islands government in such litigation and the extent of the Attorney General’s au...