New York Yankees co-owner and managing partner Hal Steinbrenner prevailed in a lawsuit brought by the Internal Revenue Service seeking to recover $670,494 from what the government alleged was an unwarranted tax refund.
The IRS, in a complaint filed in federal court in Tampa, Florida, sought to reclaim the funds issued to Steinbrenner in December 2009. The refund stemmed from disputes between Steinbrenner and the IRS over the 2001 tax year and audits of the Major League Baseball team’s parent company for 2001 and 2002, according to court papers.
U.S. District Judge Steven Merryday today ruled that the IRS sought “impermissibly in this action to disestablish, impinge, blur or selectively ignore” federal law setting boundaries on the tax treatment of partnerships in that the law didn’t apply to Steinbrenner’s deadline for seeking a refund.
Hal Steinbrenner is one of the children of George Steinbrenner, who died in 2010. George Steinbrenner and the IRS settled the questions raised in the audit in an agreement accepted on March 1, 2007, according to the complaint.
That agreement resulted in adjustments to the tax returns of the beneficiaries of a family trust, including Hal Steinbrenner’s 25 percent share. According to the complaint, Hal Steinbrenner paid his taxes in 2008, and then filed an amended 2001 tax return in 2009 seeking a refund because of a $6.8 million net operating loss carried back from 2002.
The IRS paid the refund, and then said that the refund claim should have been filed by March 1, 2009, more than five months before Hal Steinbrenner sought the refund.
Dean Patterson, an IRS spokesman, declined to comment on the ruling, saying federal law prohibits the agency from discussing specific taxpayers.
“It’s the right result and we’re very pleased,” Ed Koren, a lawyer for Steinbrenner at Holland & Knight LLP, said in an interview. “It was a very technical issue.”
The case is U.S. v. Steinbrenner, 11-cv-02840, U.S. District Court, Middle District of Florida (Tampa).