2012 GOP presidential nominee Mitt Romney will hit the fundraising circuit in Texas tomorrow, attending a fundraiser in San Antonio hosted by billionaire Billy Joe McCombs. Likely not on the table for discussion, though, is the fact that McCombs was ordered by the IRS to pay $44.7 million after using a scheme meant to avoid capital gains taxes:
McCombs is contesting the IRS’ assertion that he should have reported $213.4 million in long-term capital gains in 2002 from the sale of 11.3 million shares of Clear Channel Communications Inc., the company he cofounded in 1972. He’s also disputing an additional $3.3 million in 2003 capital gains in connection with the same purported sale. In all, the IRS asserts, McCombs had $245 million in taxable income for 2002 and 2003, rather than the $18 million he reported and owed $53 million in income tax, not the $8 million he paid.
The case involves a complicated strategy, which was widely peddled by Wall Street as a way for rich folks like [billionaire Phil] Anschutz and McCombs to raise cash from highly appreciated stock positions, while deferring capital gains tax.
In the last few years, the IRS has attempted to crack down on these schemes, much to the chagrin of the billionaires who use them. McCombs settled his case last year.
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