Some stories require a lot of patience and a lot of checking.
This is such a one.
I began following the U.S. Tax Court case of former Waddell & Reed C.E.O. and chairman Keith A. Tucker in May 2010, two months after I started writing this blog and five years after Tucker was forced out at Overland Park-based Waddell & Reed.
I was a Johnny-come-lately because in 2010 the case had already been in Tax Court for six years.
Tucker, who formerly lived in one of the most breathtaking homes in Kansas City — a Louis Curtiss designed residence on the northwest corner of 55th and Ward Parkway — claimed a very questionable tax loss of $39.2 million for the year 2000, the same year he and his wife Laura reported $44.2 million in wages and salaries.
The $40-million-plus windfall came from Tucker having exercised options on nearly two million shares of Waddell & Reed stock two years after the company went public and its stock price rose sharply.
Tucker didn’t want to pay the taxes on the windfall, so he got himself into a tax shelter designed by a former employer, the accounting firm KPMG.
Tucker
The IRS ruled against the shelter, which revolved around foreign-currency options, and billed Tucker and his wife Laura, $15.5 million for a year 2000 tax deficiency, plus a $6.2 million penalty. The Tuckers contested the ruling in 2004, setting in motion a torturous, 13-year journey in U.S. Tax Court.
I thought it might never be resolved. Exceedingly rich people, as we all know, have a knack for forestalling their day in court. Of course, having oodles of money and being able to hire an armada of lawyers helps push the calendar back, back, back. (Tucker hired at least eight lawyers to represent him in the tax case.)
So, the case dragged on through countless motions and counter-motions, through a one-day trial in 2016 and finally through post-trial filings. I have a manila folder headed “Tucker, Keith” that I would pull out every few months and then go to the U.S. Tax Court website to see if there had been any developments.
Yesterday, I pulled out that file, went to the website and — lo and behold — discovered a judgment had been entered on Sept. 20 by Judge Joseph Goeke in Washington.
The ruling: “(T)here is a deficiency in income tax due from petitioners for the taxable year 2000 in the amount of $15,518,704.”
I could hardly believe it…Even though the judge nullified the penalty, it appears the government is going to get its share of taxes from Tucker’s windfall, realized here in Kansas City 17 long years ago.
(I cannot tell if Tucker can appeal this ruling. Some Tax Court cases cannot be appealed, and it appears to me this is in that category, but I don’t know enough to be sure. And from what I’ve read, even if he could appeal the ruling, his chances of winning appear exceedingly slim.)
**
The federal tax case is not the reason I initially homed in on Keith Tucker.
What first stuck in my craw was the fact that after buying the 55th and Ward Parkway home in 1998, he and his wife had tall shrubs erected around the house, effectively blocking the views from both 55th and Ward Parkway.
Built for Bernard Corrigan, a Kansas City streetcar developer in the early 1900s, the home is considered to be one of the best examples of Prairie Style architecture in the Midwest. Two of its most prominent features are its leaded-glass windows and gray limestone walls.
The 55th and Ward Parkway home, as seen either from within a shrub line designed to block the street view or before the shrub line was erected.
I used to look at that house every time I drove by. And then, after the Tuckers shrouded it, it took on a whole new connotation for me. Truth is, it made me want to throttle Keith Tucker. (I wrote one blog post about this in April 2010 and another in May 2010.)
But if hiding that jewel of a home wasn’t enough, the tax-scamming Tucker did something else that absolutely galled me.
In trying to evade a $1.2 million bill in city earnings taxes — a tax the city imposes on both residents and people who work in the city — Tucker claimed he never legally resided at that home. He contended he was actually a resident of Dallas, where he and his wife had come from.
Talk about crust…He and his wife bought the house, together, in 1998 and lived in it until it was sold in 2005. During that period, they also hosted cocktail parties, political fund-raisers and even Waddell & Reed board meetings at the home. And — oh, yes — the phone book listed Keith Tucker at that address.
Fortunately, a Jackson Country Circuit Court judge saw through Tucker’s smokescreen and ruled in the city’s favor. In 2008, the Missouri Court of Appeals upheld the lower court ruling, and Tucker had to pay up.
I took this picture from 55th Street, the south side of the home, in 2010.
**
After leaving Kansas City, the Tuckers returned to Dallas, where Tucker heads a company called Century Bridge Capital, which describes its focus as investing in “the growing Chinese real estate sector by forming joint ventures with Chinese real estate development companies.”
Oh, boy…I just hope officials with the Chinese companies Tucker is doing business with get a chance to read Judge Goeke’s 86-page ruling. Actually, all they have to read is one key line, which says the foreign-currency options Tucker purchased in December 2000 “offered no reasonable expectation of any appreciable net gain but rather were designed to generate artificial losses by gaming the tax code.”
Tax gamer, that’s Keith Tucker. I’m glad he’s gone. Now I just wish whoever lives on the northwest corner of 55th and Ward Parkway would rip out those shrubs and let area residents once again delight in the view of that incredible home.
Speaking of 55th and Ward Parkway, I was quite surprised you never wrote about the removal of the United Daughters of the Confederacy monument. I was also amazed that this monument escaped all the controversy associated with the Confederacy for so many years.
http://kcparks.org/attraction/united-daughters-of-the-confederacy-memorial-2/
Good reporting/writing, Jim.
Thanks, Tim. As you know, it’s gratifying to follow a story for a long time and be able to report on a satisfying resolution.
Good work, Jim! I think you should reward yourself by putting your feet on your desk and reading the New Yorker.
Or taking you friends to lunch finally.
Good suggestions by both of you…(Julius, you never forget anything!)
I spoke with a clerk in the judge’s office this morning, and she said the Tucker case is eligible for appeal. Tucker’s attorneys have 90 days — or until about Dec. 30 — to file an appeal with a U.S. District Court of Appeals.
I have little doubt he will appeal. His game is delay, delay, delay…He’s in his early 70s and probably would prefer to die before having to shell out what is rightfully the government’s.
…Rest assured, I’ll be watching as long as I’m drawing breath.
I had lunch with Dwight Sutherland today and the house in question was his grandparent’s house. According to him, every resident has had bad luck befall them. This guy is the second owner to have severe tax problems, the judge who owned it before fell down an elevator shaft working on an appraisal case and a young clerk for the judge who lived there during their time with the judge, and now a circuit court judge themselves, insists that the place is haunted.
Nothing unduly weird has happened in that house.
The judge you referred to was Michael Coburn, who was on the Jackson County bench in the 1980s and 1990s. Coburn died in December 1994 after falling into an unsecured elevator shaft of an abandoned building in the Blue Hills neighborhood (the old Blue Hills) during an inspection of the building, which, I believe the city was trying to get condemned. A group of people was on the tour in the darkened building and they only had one flashlight. Judge Coburn was out front, moving quickly, and down he went.
He once told The Star about a rather unusual burglary that took place at the house. After he and his wife Linda heard noises during the night, he got up to check and discovered an intruder. He described it something like this: “We wrestled for a while and both got tired. We rested a while and then started wrestling again.”
Eventually, the burglar gave up and left.
And Tucker didn’t make the house haunted; he was just an asshole who didn’t deserve to live there.
I believe Ann Dickinson, retired C.E.O. of Bank Midwest, lives there now.
Weird, I don’t know, but Dwight’s grandfather died at 56, and I believe he said the builder died before he even lived there. At any rate, according to Dwight, the house is considered to be jinxed.