Appeals court says Anschutz owes $17.3M in taxes

Legal News Center

A federal appeals on Tuesday agreed with a tax court that determined Colorado billionaire Philip Anschutz owed at least $17.3 million in taxes.

The 10th U.S. Circuit Court of Appeals in Denver upheld the tax court's 2010 ruling. The court said the Anschutz Co., which Anschutz owns, is also liable for at least $77 million in taxes.

Anschutz spokesman Jim Monaghan said Anschutz already paid the taxes but appealed that he owed them. Anschutz's wife, Nancy, was also named in the case because they file tax returns jointly.

The taxes are from stock transactions in 2000 and 2001.

At issue were stock deals that were structured to spread the tax liability out over several years. Judges agreed with tax regulators that that the transactions were sales, and not pending transactions as Anschutz argued.

Such transactions executed through so called variable prepaid forward contracts and share-lending agreements are a fairly common practice by large shareholders hoping to raise money while deferring taxes, according to Robert Willens, a former Lehman Brothers director who now heads a Wall Street tax and accounting firm.

According to the court documents, the Internal Revenue Service in 2003 issued guidance on how the transactions should be structured to avoid taxes, but Willens said the IRS in 2006 issued another letter warning that the arrangements could result in taxable income. In a friend-of-the-court filing in the case, Liberty Media Corp. argued the transactions amount to loans, not sales, and that they provide an important way for companies to raise money and create jobs.

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