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IRS Goes After Billionaire Sumner Redstone for 1972 Tax Gift
Author: Scarinci Hollenbeck, LLC
Date: May 24, 2013
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Billionaire Sumner Redstone may be on the hook for a large sum of money relating to a tax gift he made to his children in 1972 if the Internal Revenue Service has its way.
The federal agency claims Redstone owes $1.1 million in taxes, penalties, and interest relating to stock given to his children 41 years ago, according to Bloomberg News. However, the CBS and Viacom chairman argues that the stock should not be considered a gift under federal tax law, but instead as an “ordinary business transaction.”
The dispute revolves around a family lawsuit that occurred in the 1970s. While Sumner was employed at his family’s business, his brother Edward left the family-owned company and threatened to sell off shares of the business outside of the family.
The family was able to reach a settlement with him, though, under which Edward’s shares were instead directed to his children as well as Sumner’s son and daughter, Bloomberg explains. However, the fact that Sumner Redstone failed to file a tax return for the year in question has complicated the matter, as there is no statute of limitations on taking action against individuals in years when no return was filed, the news source adds.
In a petition filed with the U.S. Tax Court, Redstone noted that in the past 41 years, the IRS has never claimed that he extended taxable gifts in 1972.
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IRS Goes After Billionaire Sumner Redstone for 1972 Tax Gift
Author: Scarinci Hollenbeck, LLC
Billionaire Sumner Redstone may be on the hook for a large sum of money relating to a tax gift he made to his children in 1972 if the Internal Revenue Service has its way.
The federal agency claims Redstone owes $1.1 million in taxes, penalties, and interest relating to stock given to his children 41 years ago, according to Bloomberg News. However, the CBS and Viacom chairman argues that the stock should not be considered a gift under federal tax law, but instead as an “ordinary business transaction.”
The dispute revolves around a family lawsuit that occurred in the 1970s. While Sumner was employed at his family’s business, his brother Edward left the family-owned company and threatened to sell off shares of the business outside of the family.
The family was able to reach a settlement with him, though, under which Edward’s shares were instead directed to his children as well as Sumner’s son and daughter, Bloomberg explains. However, the fact that Sumner Redstone failed to file a tax return for the year in question has complicated the matter, as there is no statute of limitations on taking action against individuals in years when no return was filed, the news source adds.
In a petition filed with the U.S. Tax Court, Redstone noted that in the past 41 years, the IRS has never claimed that he extended taxable gifts in 1972.