You know how it sometimes seems to take forever to bring criminal defendants to trial?
Well, the delays in criminal cases sometimes pale beside U.S. Tax Court cases, which play out away from the headlines, in the complex machinery of tax law and IRS rules and regulations.
One case that I’ve been tracking is now 10 years old and still not decided. With any luck, a trial or settlement will take place in 2015. I am anxious to see this case resolved in favor of the government because the defendant, a former Kansas City resident, owes the federal government millions of dollars in income taxes and needs to be forced to pay up.
The defendant is Keith Tucker, a former chairman and chief executive officer at Waddell & Reed, an Overland Park-based mutual fund company.
I don’t like Tucker, who now lives in Texas with his wife Laura, for two reasons: First, because of his tax dodge, and, second, because he largely concealed from public view perhaps the most beautiful home in Kansas City — a Louis Curtiss-designed residence on the northwest corner of 55th and Ward Parkway.
Surely, you’ve seen it…I hope it was before the Tuckers ensconced it with veritable walls of tall shrubs on the east and south sides.
The man who commissioned construction of the home for himself and his family was Bernard Corrigan, who built his fortune partly as a streetcar developer. Work on the home at 55th and Ward Parkway began in 1912. Two of the home’s outstanding features are the reinforced-concrete foundation and the gray limestone exterior walls, with a medium-rough, or “shot-sawed” finish.
Considered to be one of the best examples of Prairie Style architecture in the Midwest, the home also features beautiful, leaded-glass windows, antique exterior light fixtures and an unusual, L-shaped footprint.
The Tuckers bought the house and surrounding 2.4 acres in 1998 for $1.65 million. The home sold for $6 million in 2005. To the best of my knowledge, it has been owned since then by Ann Dickinson, former chairwoman of a holding company that formerly owned Bank Midwest.
But back to Tucker and his financial shenanigans.
Under his watch at Waddell & Reed (1992 to 2005), the company was often entangled in litigation. Just before he resigned, the firm agreed to pay $7 million in fines and up to $11 million in restitution to settle charges that it aggressively pressured customers into buying unnecessary annuities.
In 2004, the U.S. government charged Tucker with tax fraud, alleging that he and his wife owed more than $22 million in income taxes and penalties. The IRS contends that the Tuckers claimed $39.2 million in sham tax-shelter deductions. The shelters, which many people took advantage of, were put together by the accounting firm KPMG.
For years, the Tucker case lay dormant while charges against KPMG executives were being resolved. KPMG admitted in 2005 that it sold bad shelters, but it took years for elements of the case to play out in courts. In a pivotal decision late last year, the U.S. Supreme Court sided with the IRS and said that the government could collect a 40 percent penalty — over and above the taxes owed — from a taxpayer who had used the illegal shelter.
Seemingly, that precedent-setting case has opened the doors for trial or settlement of many similar cases.
So, on March 17, after years of rote entries delaying the Tucker case, a U.S. Tax Court judge signed an order, which said: “Upon due consideration…the Court has determined that these cases will be tried during the first half of 2015. ”
The judge also ordered the parties to file a report by June 2, saying which month they would like the case to go to trial.
I hope the government is able to clean Tucker’s clock. But given his proven ability to dodge and weave and work the system, that probably won’t happen. In addition, 90 percent of Tax Court cases are settled before trial. Still, the government should be able to extract several million bucks from the Tuckers.
I’ve believed all along that Tucker erected those shrubs around that beautiful home on Ward Parkway because he had something to hide. Looks like the government is about to smoke him out.