You’ll recall that two years ago a federal magistrate judge ruled that Andy Beal used a bogus tax shelter to create $153.6 million in tax losses for 2001. The judge also ruled, however, that the IRS had missed the deadline for disallowing those 2001 losses. A win for Beal.
Late last week, that win turned into a loss in the Firth Circuit Court of Appeals. Looks like the IRS didn’t miss its deadline after all. If you believe what the feds say, the loss on the 2001 tax year matter will cost Beal $70 million in tax and penalties. A pittance compared to the $5 billion his ex-wife wanted. (Of course, Beal’s ex is represented by Larry Friedman, which is all you need to know about which side you should root for.)