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The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Friday, August 18, 2006 Ex-Waddell & Reed CEO Fights Tax Bill Keith A. Tucker is making headlines again. The retired CEO of Kansas City-based Waddell & Reed is gaining the attention for his fight with tax authorities who he claims are assessing him too much in both Kansas and federal taxes. The Kansas City Ster reports that Tucker is disputing a $1.2 million tax bill assessed by Kansas City on the claim that he is actually a resident of Dallas. Waddell & Reed is one of that city's largest financial services firms and acts both as a broker-dealer and mutual fund advisor. Tucker resigned as its CEO last year after it settled NASD allegations that it improperly converted variable annuity holders' contracts. Tucker is not a rookie at negotiations with the taxman. For much of the past two years he has been in a fight with the IRS over the agency's contention that he owes $21.7 million in additional taxes. The dispute arose after Tucker and his wife used a KPMG-created tax shelter for $39.2 million in income. The shelter used a series of money-losing transactions in foreign currency options and an Irish private company owned by a Tucker-controlled company Sligo (2000) Co. Inc. KPMG had put together similar shelters for high networth clients, only to see the strategies shot down by the IRS. It paid a $456 settlement to the agency. Currently, 17 former KPMG executives, including one of the accounting firm's attornies and an investment adviser, are being tried in New York on criminal charges for allegedly marketing fraudulent shelters, filing fraudulent income-tax returns and concealing the shelters from the government. The Kansas City case is not related to the federal case. At its heart, the local case comes down to the city's claim that Tucker is claiming Dallas residency only to avoid a local one percent income tax levied on Kansas City residents. The second case involves a dispute over where the Tuckers have lived since he left Waddell & Reed last year. City authorities claim the Tuckers reside in an historic mansion on Ward Parkway, a property the Star describes as one of the city's most lavish residences (and which he sold last year). To support their claim, city authorities point to real estate records and Tucker's involvement in civic affairs, including his hosting of cocktail parties, political fund raisers and even Waddell & Reed board meetings at the home. They also point to more mundane evidence, such as his listing in the local phone book. "The City believes these connections to Missouri are more substantial than the Taxpayer’s associations with Texas because the Taxpayer has an incentive to link himself with a state that has no income tax," city argued in a court filing. Tucker, on the other hand, claims that he moved to Dallas after leaving Alabama in 1992 and has not ever been a Kansas City resident. His lawyer pointed out that Tucker has two houses in Dallas, has voted in Dallas, is a member ot the Texas Bar and received his CPA license in Texas. "When you look at the record, you’ll see there’s a mountain of evidence that this guy is a Texas resident, always has been," Tucker's attorney Michael White told the Star. "It isn’t like he’s shopping for a forum to say he lives in." Tucker is also challenging the constitutionality of the Kansas City tax, claiming that the statute does not properly define a "resident individual." "They have no definition anywhere in City Hall of what a resident is," said White. City lawyers will present their case on October 23. Printed from: MFWire.com/story.asp?s=12581 Copyright 2006, InvestmentWires, Inc. All Rights Reserved |