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Judge dismisses tax dispute lawsuit
The federal court dismissed on Tuesday separate lawsuits filed by Bridge Capital LLC chief executive officer John K. Baldwin and his company in Delaware against the U.S. government over a tax dispute.
U.S. District Court for the NMI designated Judge Frances M. Tydingco-Gatewood dismissed Baldwin’s and Claston LLC’s lawsuits at their request.
Dismissed with prejudice means Baldwin and Claston LLC can no longer re-file the lawsuits.
Tydingco-Gatewood directed the clerk of court to close the cases.
Baldwin and Claston LLC, through their Michael Dotts and Deborah Deitsch-Perez, and the U.S. government, through Tax Division senior litigation counsel Joseph A. Sergi, moved to dismiss the lawsuits pursuant to their agreement that settled both cases.
Last October, Baldwin told Saipan Tribune that although the 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.
Baldwin said the essence of this case is that the IRS overcharged him on taxes, which he paid.
He said IRS then agreed to refund him over $4 million that was overcharged, subject to an offset for taxes owed on another matter.
Last Sept. 28, 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 about $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 Sept. 28 order resolved the two remaining issues in the two lawsuits as it finally completed calculations about tax due and interest.
