The estate of former Detroit Pistons owner Bill Davidson, who died in 2009, is challenging the IRS’ assertion that it owes the government at least $2 billion in estate taxes.
The estate has filed a petition in U.S. Tax Court in Washington D.C. claiming that the estate owes no more than it has already paid.
In 2008, Forbes labeled Davidson, with a net worth of $5.5 billion, the 62nd-richest man in the United States.
As discussed more fully by the Detroit Free Press, some of the issues in the case include the worth of certain assets and “swaps made to trusts for Davidson’s children or grandchildren.” Before his death, Davidson set up trusts in the names of his wife, children, and grandchildren.
Many disputed transfers involve what the IRS classifies as gifts, but which Davidson’s estate maintains were not.
While the estate tax, or death tax as some call it, tends to make the news, in reality it affects a relatively small number of estates; it doesn’t kick in until an estate reaches a value of more than $5.25 million, according to James Hines Jr., University of Michigan law professor.
Experts quoted in the Detroit Free Press article believe that this case could even make it to litigation because of the extremely high dollar amounts involved; in any event, it certainly represents one of the largest disparities between what an estate believes and what the IRS believe is owed in taxes in the history of American estate taxes.