James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Former NBA Team Owner's Estate Challenges IRS on $1.9 Billion in Estate, Gift Tax Dispute
Author: James F. McDonough
Date: June 27, 2013
Key Contacts
Back
The estate of the former Detroit Pistons’ owner Bill Davidson is challenging the Internal Revenue Service over what could be one of the largest and most substantial estate tax law cases heard in recent years.
Representatives for the late Davidson filed a suit in the U.S. Tax Court in Washington, D.C., arguing that the IRS wrongly claimed roughly $2 billion in underpayments of estate and gift taxes, penalties, and interest. However, the true amount the IRS may go after might reach as high as $2.8 billion, although the estate may not be required to pay more than $2 billion, the Detroit Free Press reports.
The issue surrounding Davidson’s estate and gift taxes revolves around several transactions and transfers he made to children and grandchildren prior to his death in 2009. Davidson, who owned several sports franchises during his life, established trusts worth tens of millions of dollars for each of his survivors. However, the IRS claims that the accountants managing the transactions undervalued privately held Guardian stock placed in those trusts by as much as $1,500 per share, the Free Press reports. In addition, the value of other key assets is also being debated by the IRS and Davidson’s estate, the representatives of which argue that the federal agency is overvaluing certain assets.
The IRS is also scrutinizing gifts Davidson made, many of which date back into the mid-2000s, arguing that he failed to pay the correct amount of taxes on sizable sums. The news source reports that the total value of these gifts may amount to more than $900 million.
Bill Davidson ranked No. 62 on Forbes’ list of richest men in the U.S. in 2008, during which time his net worth was estimated to be $5.5 billion. Representatives of his estate argue that he owes nothing more to the IRS than what was already paid out in estate taxes.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
Author: Paul Grossman
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.