Feeds

EMC founder clashes with IRS over 'tax evasion' scheme

Gimme back my $62m

High performance access to file storage

Richard Egan, ex-marine and a founder of EMC, is suing the US Internal Revenue Service for the return of $62m taken from him after the IRS decided option trading arrangements he had entered into were a tax avoidance scam. Egan insists the trades were genuine.

EMC-founder Richard Egan

Egan, an ex-US ambassador to Ireland, is involved in the case because he and his wife - both ex-board members of storage giant EMC - together with three other people set up two partnerships which traded in options and made losses. These losses offset investment gains made in other activities, and reduced the partnership members' tax liabilities in the 2001 and 2002 tax years.

The case is being held in Worcester, Mass, in front of District Court Judge F Dennis Saylor IV. There will be no jury as it is a civil case.

The IRS asserts that the option trades were essentially a fraud, existing only on paper, with no intention other than to create a lowered tax bill. Egan says he merely followed the advice of lawyers, accountants and tax advisors. He claims the partnerships were set up to reduce his exposure to short-term volatility in the value of his massive holdings of EMC stock. The IRS says this group of people was just an off-the-shelf crew used to try and turn a defrauding tax shelter into a legitimate tax reduction exercise.

Egan is the lead partner in each partnership for tax purposes. Forbes magazine reckons he is worth $1.4bn and ranked 355 in a list of the richest Americans. He resigned from EMC's board in September 2001 to represent the USA in Ireland, when the tax avoidance or reduction measures were taking place. President Bush, a grateful recipient of funds from Egan, nominated him to be Ambassador Extraordinary and Plenipotentiary of the United States. During his two years in Ireland he was described as both invisible and bullying, as well as being bored with Dublin. Extraordinary indeed.

More on all this here. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.