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Baldwin says it is IRS that has to pay him
Bridge Capital LLC chief executive officer John K. Baldwin said yesterday that although the federal court ordered him to pay a $2.1 million tax and penalty capped at 15 percent, it is the Internal Revenue Service that owes him.
Asked for comments about the federal court’s order, Baldwin said this was a complicated tax case that people are confused about.
Baldwin said the essence of this case is that the IRS has overcharged him on taxes, which he paid.
He said IRS then agreed to refund him over $4 million that is overcharged, subject to an offset for taxes owed on another matter.
“It is the IRS who now has to pay me. I don’t have to pay them,” Baldwin said.
Last Thursday, U.S. District Court for the NMI designated Judge Frances Tydingco-Gatewood ordered Baldwin to pay $2,085,902 and a penalty arising from his investment in Claston, a limited liability company in Delaware.
The federal tax dispute was settled in 2012 when the U.S. government agreed that a $4.1 million (plus interest) tax refund was due to Baldwin after the U.S. government wrongfully demanded approximately $5 million in taxes.
Baldwin had paid the $5 million, but he and Claston LLC then filed two lawsuits against the U.S. government. The U.S. government eventually conceded that the $5 million were in large part not due.
Baldwin then agreed that any amount due as a result of the resolution of the Claston case could be deducted from his refund.
Tydingco-Gatewood’s order last Thursday resolved the two remaining issues in the two lawsuits as it finally completed calculations about tax due and interest.
