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Wyly Widow: IRS Failed to Prove Fraud over $1.2 Billion

Submitted by ckanon@abi.org on
The widow of Texas billionaire Charles Wyly told a judge that the Internal Revenue Service wrongly accused her of a “sinister” tax-avoidance plot to bolster the agency’s $1.2 billion claim in her bankruptcy case, Bloomberg reported yesterday. Caroline “Dee” Wyly asked the bankruptcy court to toss out a $386 million fraud penalty sought by the IRS, arguing that there is no evidence that she systematically deceived the agency for 22 years. Wyly, who was married to Charles Wyly for 56 years before his death in a 2011 car crash, said she regularly signed tax documents without reviewing them because she trusted her husband and their advisers. She sought chapter 11 protection last year after a New York jury found that her husband and his brother, Samuel Wyly, carried out an offshore stock-trading fraud that generated hundreds of millions of dollars in illegal profit. The IRS is seeking more than $3 billion in back taxes from Sam Wyly and his brother’s estate. The bankruptcy is Samuel E. Wyly, 14-bk-35043, U.S Bankruptcy Court, Northern District of Texas (Dallas).
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