Richard Egan’s Estate Receives Forty Percent Penalty

The legal team defending Richard Egan, the founder of Fidelity International Currency Advisors, witnessed a victory last December when they were able to disallow $65,896.10 of the $220,944.65 in litigation expenses the federal government attempted to charge them with. However, Egan still had to pay $80 million in tax and penalty for its doomed tax shelter.

The legal team attempted to cut the $80 million penalty in half. The IRS argued, however, that a 40% penalty for gross valuation misstatements applied. On October 21, 2011, the United State Court of Appeals for the First Circuit agreed with the IRS and applied a 40% penalty against Richard Egan’s Estate.

For an overview of this decision see Peter J. Reil, Richard Egan Estate Subject to 40% Penalty on Doomed Shelter, Forbes, Oct. 28, 2011.