Sleight of Hand Has IRS After Billionaire

Anschutz owes $143M on gains, feds say; he claims technicality
By Kevin Spak,  Newser Staff
Posted Jun 9, 2008 1:45 PM CDT
Head of AEG Philip Anschutz, left, and Fox chairman Peter Chernin watch a World Series of Football exhibition soccer game at the Home Depot Center on Saturday, July 21, 2007 in Carson, Calif.    (AP Photo/Kevork Djansezian)
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(Newser) – The IRS is going after the US’ 41st-richest man, the Wall Street Journal reports, as part of a larger move to curtail one method of skirting capital-gains taxes. Philip Anshutz owes $143.6 million in back taxes on a “variable prepaid forward contract” deal he made in 2000 and 2001; though the billionaire claims a technicality, the agency is looking into similar transactions.

In these deals, investors agree to sell stock sometime in the future, then loan the buyer (often an investment bank) the same amount of stock, in return for some 80% of its value. “One guy's got the money, and the other guy's got the stock,” one tax expert says of arguments that the transaction's not taxable until it's complete. “What more do you need?”