1972 was a big year for media, with the premiere of "The Waltons" on CBS and the debut of "The Godfather" in movie theaters. On top of that, according to the IRS, media mogul Sumner Redstone made a taxable gift to his kids and failed to file a return. Now the tax agency is collecting, reports the New York Post.
The Internal Revenue Service informed the 89-year-old Redstone, the executive chairman of Viacom, that he owes $1.1 million in taxes and penalties (including interest) because of a gift of stock to his son and daughter, the story notes. The stock was in the family’s National Amusements theater chain and came after the settlement of a family lawsuit.
“I can’t remember ever hearing of anybody going back 41 years to raise an issue. It’s really unprecedented in my experience," Richard Behrendt, a former IRS estate and gift tax auditor who is now director of estate planning at Robert W. Baird & Co., told the Post.
Redstone is arguing that what the IRS claims was a taxable gift was an "ordinary business transaction" because of the lawsuit. He filed a petition last month in which he calls the lawsuit a "bitter family dispute" from the early 1970s that involved Redstone’s late brother Edward, the story notes.
The settlement gave some shares in the theater chain to both Edward’s and Sumner’s kids, the report adds. Because no tax return was filed, there’s no statute of limitations, according to Behrendt.
Redstone’s attorney didn’t immediately return a call for comment and the IRS said it doesn’t comment on pending litigation.