The Internal Revenue Service has obtained a $388 million settlement with the estate of former Detroit Pistons owner Bill Davidson. The estate initially had a deficiency of $2 billion according to the IRS. This article breaks down the specifics of the IRS claims. Undervalued corporate stock and self-cancelling installment notes (SCINs) were the two main issues that lead to the IRS claims of deficiency. SCINs are a legitimate tax planning devices, but the IRS takes a firm stance on how a person values the notes. There is currently a lot of heated political debate surrounding the issue of the estate tax. This issue will likely play a major role in the 2016 elections.
See Ashlea Ebeling, IRS Grabs $388 Million From Billionaire Davidson Estate, Forbes, July 8, 2015.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
