|Tax troubles dog Warriors owner Cohan|
|Written by Admin|
|Thursday, 17 May 2007 12:25|
The Internal Revenue Service says Cohan owes more than $160 million in back income taxes and penalties from the 1998 sale of a cable television company.
The IRS claims Cohan set up three tax shelters to avoid a hefty bill after selling cable TV company Sonic Communications to Charter Communications for more than $200 million. As a result, the government is demanding about $95 million in past due taxes and another $66 million in penalties from Cohan, federal court records show.
``All three tax shelters were promoted, funded and closed as a package deal for Cohan's benefit,'' a motion the government filed in February states.
Cohan's attorney, Edward Robbins, didn't return a telephone call or an e-mail seeking comment from The Associated Press. A Warriors spokesman said the team had no comment.
In previous testimony, Cohan said that trusted advisers were in charge of all decisions regarding the Sonic sale.
The government alleges that Cohan paid $14 million to accounting firms KPMG and Presidio Advisors, Inc. to set the shelters up.
``The Cohans acknowledged entering into two tax shelter transactions ... overseen by Presidio Advisors, on the advice of KPMG Peat Marwick LLC and petitioner's attorneys that these were valid and supportable transactions,'' the motion states.
KPMG and Presidio Advisors are both subjects of federal criminal investigations into abusive tax shelters. Cohan is not a target of the criminal inquiry, however.
A previous attempt by the government to sue Cohan for the back taxes was unsuccessful. In 2005, Cohan's attorneys successfully argued that documents the IRS needed as evidence were protected by attorney-client privilege.
But the case was reopened in February after the federal government argued that Cohan had waived his attorney-client privilege during hearings in U.S. Tax Court.