The surviving family of billionaire businessman Carl Pohlad is arguing that the Internal Revenue Service’s valuation of a Major League Baseball team he owned is inaccurate and has subjected his son to wrongfully inflated estate tax payments. The late magnate’s heir, Jim Pohlad, argues that the IRS has significantly overestimated his father’s interest in the team. That assessment is a primary factor in the $207 million tax bill the estate currently faces. The federal tax agency is also seeking a $48 million “accuracy related” penalty. The Pohlad family is requesting a trial in a Texas tax court.
Although this case involves an uncommonly large amount of money for a tax dispute, many Texas residents who have inherited assets from a deceased relative or loved one can relate to the often frustrating process of dealing with and contesting estate taxes levied by the IRS. However, the owners of large estates can significantly ease the impact of such taxes on their heirs by exercising effective estate tax planning and asset protection strategies with the help of a qualified Texas attorney with experience in tax law.
The Pohlad estate contends that Carl Pohlad was a minority owner of the MLB club at the time of his death, as his three sons controlled roughly 90 percent of the team’s voting shares, arguing that this fact is not appropriately represented in the IRS’s assesment of the team’s value. The family also asserts that the evaluation failed to similarly account for the effects of the economic recession, which had particularly dramatic effects on the U.S. economy at the time of Carl Pohlad’s death in 2009. While the IRS assessed the value of Pohlad’s interest in the team at $293 million, appraisers hired by the estate said the Pohlad’s shares were worth about $24 million at the time of his death.
An IRS spokesperson declined to speak on the case, noting that the agency “does not comment about ongoing litigation.” However, Jim Pohald claims that family is working with the IRS to resolve the issue, noting that the estate is “respectful of the IRS and its position.”
Source:
Star Tribune, “Pohlads go one-on-one with IRS” David Phelps, Jul. 22, 2013