DETROIT (WWJ/AP) - The estate of former Detroit Pistons owner Bill Davidson is challenging the government in U.S. Tax Court over billions of dollars claimed by the Internal Revenue Service.
Before his death in 2009, Forbes Magazine called Davidson the 62nd richest man in the United States, with a net worth over $5.5 billion. But the IRS says Davison’s estate owes over $2 billion in taxes – generated because of underpayments in estate taxes, gift taxes, and now penalties.
At issue in the case are a series of financial transactions Davidson made in the months before he died to transfer some of his vast wealth to his children and grandchildren, the Detroit Free Press reported. Other key issues include tens of millions of dollars given to Davidson’s wife, Karen, and taxes on money used to help her daughter build a home in Bloomfield Hills.
The IRS also objects to how Davidson’s accountants valued stock in his company, Guardian Industries, which makes glass and parts for the auto industry. The IRS says Davidson’s accountants undervalued the stock, while Davidson’s estate says the IRS is overvaluing the stock.
Davidson’s estate says they don’t owe the IRS anything and that all the taxes have been paid.
“The lawsuit could be one of the largest tax disputes in the country,” said WWJ Legal Analyst Charlie Langton.
Davidson died in March 2009 at age 86.
TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.