Taxonomy entities are now classed objects

    $term = entity_create('taxonomy_term', array(
      'name' => 'Test term',
      'vocabulary' => $vocabulary->machine_name,
      'description' => NULL,
      'format' => 1,
    ));
    taxonomy_term_save($term);

$vocabulary = new TaxonomyVocabulary(array(
  'name' => 'New Vocabulary',
  'description' => 'My description',
  'machine_name' => new_vocab',
  'weight' => 5,
));
taxonomy_vocabulary_save($vocabulary);
return $vocabulary;