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The owners of the LA Chargers are disputing their tax bill

Dean Spanos, the current owner of the NFL’s Los Angeles Chargers, and sister De Spanos the Barbarian, both executors of the estates of former Billionaire owner Alexander Spanos of the Chargers and his wife, Faye Spanos, are challenging $5.8 million in tax loopholes and dues of the estates. Fixation of punishment against Specifically, the couple’s children are contesting $4 million in tax deficiencies, $994,819 in penalties and $798,183 in accuracy-related penalties assessed against the Spanos Family Trust (SFT) for the 2017 tax year.

After the couple’s death in 2018 the trust became an irrevocable nonrefundable trust, with the couple having four children as the primary beneficiaries. This isn’t the Berberian’s first lawsuit involving the trust; Last year she sued, saying that Los Angeles County Superior Court forced the sale of the team, citing the trust’s growing debt and financial situation, fearing that the trust would be able to pay more than $22 million. Not possible. Pledged for various charities.

tax reduction

According to Berberian and Spanos, the Internal Revenue Service made a mistake in making several adjustments to the trust’s 2017 return, which was filed on time by executors in 2019. In a petition filed in tax court, the two children claim the trust’s 2017 return was initiated without notifying the IRS to audit executors or their representatives. As a result, executors were unable to provide the IRS with any documents or records and did not become aware of the audit until they received a notice of deficiency on October 12, 2021.

Based on the petition, on the 2017 return, an amount of $2,721,600 was deducted for charitable contributions from the 2015 and 2016 tax years, both tax years that are currently under IRS audit.. because of the 2015 and 2016 audits. are not yet resolved, it continues, “contributions have not been absorbed until prior tax years and are currently fully available for carryover for the 2017 tax year.”

The petition also alleges that the trust was wrongly allocated $14 million in cancellation of debtor proceeds based on an erroneous Schedule K-1 issued to the trust by Trinity Capital Development LLC, a real estate investment company. In which SFT owns 76%.

Finally, the petition claims that the IRS wrongly denied damages of $2.8 million, which the petitioners claimed on the grounds that they were “at risk” within the meaning of Internal Revenue Code Section 465. Trinity’s revised K-1 shows that the tax year ending September 30, 2018 for: (1) SFT’s opening tax base capital account was negative $57,131,676, (2) Trinity’s ordinary losses and non-deductibles SFT’s share of qualified expenses was $2,846,795 and $309, respectively, resulting in an exhausted tax base. Capital account balance of negative $59,978,780, and (3) SFT’s share of Trinity’s recourse liabilities was $100,571,250,” indicating that the claim The trust was substantially at risk for the damages done.

seeking relief

As a result, Spanos and Berberian are asking that the court find that the listed adjustments were made in error and that the trust has no income tax for the 2017 tax year. Further, they also oppose the IRC Section 6551(a) penalty, as they claim that the 2017 return was filed on time. To the extent that any taxes are owed, the petition argues that the executors had reasonable cause for underpayment and acted in good faith.

Harvey I. Bezozzi, a Boca-based tax specialist, says, “Taxpayers believe that penalties should be assessed pursuant to IRC Section 6651(a)(1), failure to file fines, and Section 6662, Penalties relating to accuracy ” Raccoon, Fla. “Both penalties are quite severe, with a maximum of 25% and 20% respectively.”

However, he continues, “it is possible for the IRS to agree to agree for reasonable reasons and involves a combination of techniques, including thorough presentation of facts and circumstances, with a polished delivery using both negotiation and interpersonal skills.” is combined with.”

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