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Pohlad Estate Brings Lawsuit Against IRS Over $189 Million Tax Bill Regarding Minnesota Twins
Author: Scarinci Hollenbeck, LLC
Date: July 15, 2013
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Robert and William Pohlad, sons of late Minnesota Twins owner Carl Pohlad, who passed away in 2009, have brought a lawsuit against IRS regarding a disputed $189 million tax bill.
The IRS recently imposed the multi million-dollar tax liability on the heirs, arguing that Pohlad’s estate undervalued his stake in the Minnesota Twins, according to Forbes. In the lawsuit filed in the U.S. Tax Court, Pohlad’s estate valued the late owner’s stake in the Minnesota Twins at $24 million for tax purposes. However, IRS auditors disputed these figures and valued his stake at approximately $293 million. In response, the IRS tacked on $121 in additional taxes, and imposed a 40 percent penalty for “gross valuation misstatement” that amounts to an added $48 million, Forbes reports.
Further, after scrutinizing a series of wealth transfer methods Pohlad utilized to pass assets on to his heirs, the IRS also claims that he undervalued the gifts he made to beneficiaries. Pohlad made full use of the gift tax law when passing considerable wealth to heirs, and stated that the gifts he transferred amounted to $129 million. However, auditors later argued that Pohlad made $446 in taxable gifts.
Pohlad’s sons are the executors of his estate, and assert that all estate and gift taxes have been paid to the IRS. In the lawsuit, the estate asserted that it paid the $16 million in gift taxes and $26 million in estate taxes.
Several high-profile estate tax cases between the IRS and late sports team owners are currently ongoing, the most recent of which is a lawsuit waged by the estate of Detroit Pistons’ former owner Bill Davidson, who received a $1.9 billion tax bill from the IRS. In some ways similar to the Pohlad case, the IRS charges that Davidson undervalued millions in private stock that was passed down to heirs. The estate, meanwhile, asserts that all estate and gift taxes paid to the agency were accurate.
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Pohlad Estate Brings Lawsuit Against IRS Over $189 Million Tax Bill Regarding Minnesota Twins
Author: Scarinci Hollenbeck, LLC
Robert and William Pohlad, sons of late Minnesota Twins owner Carl Pohlad, who passed away in 2009, have brought a lawsuit against IRS regarding a disputed $189 million tax bill.
The IRS recently imposed the multi million-dollar tax liability on the heirs, arguing that Pohlad’s estate undervalued his stake in the Minnesota Twins, according to Forbes. In the lawsuit filed in the U.S. Tax Court, Pohlad’s estate valued the late owner’s stake in the Minnesota Twins at $24 million for tax purposes. However, IRS auditors disputed these figures and valued his stake at approximately $293 million. In response, the IRS tacked on $121 in additional taxes, and imposed a 40 percent penalty for “gross valuation misstatement” that amounts to an added $48 million, Forbes reports.
Further, after scrutinizing a series of wealth transfer methods Pohlad utilized to pass assets on to his heirs, the IRS also claims that he undervalued the gifts he made to beneficiaries. Pohlad made full use of the gift tax law when passing considerable wealth to heirs, and stated that the gifts he transferred amounted to $129 million. However, auditors later argued that Pohlad made $446 in taxable gifts.
Pohlad’s sons are the executors of his estate, and assert that all estate and gift taxes have been paid to the IRS. In the lawsuit, the estate asserted that it paid the $16 million in gift taxes and $26 million in estate taxes.
Several high-profile estate tax cases between the IRS and late sports team owners are currently ongoing, the most recent of which is a lawsuit waged by the estate of Detroit Pistons’ former owner Bill Davidson, who received a $1.9 billion tax bill from the IRS. In some ways similar to the Pohlad case, the IRS charges that Davidson undervalued millions in private stock that was passed down to heirs. The estate, meanwhile, asserts that all estate and gift taxes paid to the agency were accurate.