The Internal Revenue Service is reportedly after Golden State Warriors owner Chris Cohan for some $160 million in back taxes.Cohan, a former cable television mogul, has been legally fighting with the agency for years over the 1998 sale of his former company, Sonic Communications.
The sale to Charter Communications brought Cohan more than $200 million, and the federal governments wants to collect its share -- which it claims stands at about $95 million in past due taxes and another $66 million in penalties.
According to the San Francisco Chronicle, the IRS is claiming that Cohan set up a trio of tax shelters to avoid that bill, paying $14 million to KPMG and Presidio Advisors Inc. to set the shelters up. While those accounting firms are the subjects of federal criminal investigations into abusive tax shelters, Cohan is not being pursued on criminal charges.
A 2005 attempt by the government to sue Cohan for the back taxes was unsuccessful, when Cohan's lawyers successfully argued that documents the IRS needed as evidence were protected by lawyer-client privilege. But the case was reopened in February after the feds argued that Cohan had waived his lawyer-client privilege during hearings in U.S. Tax Court.
Lawyers for Cohan told the Associated Press that the basketball owner had settled with the IRS over one of the shelters, was close to settling on a second, and was planning to go to trial over the third shelter, the last of which represents the bulk of the disputed taxes and penalties. The final shelter is reportedly a "midco" shelter which uses a company that may not be subject to U.S. tax laws as a middle entity to evade the corporate-level tax.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access