State, IRS Resolve $2.5M Tax Claim with Petters Receiver

The Pioneer Press reports that the Minnesota Department of Revenue and the IRS-which had sought $2.5 million in assets controlled by the receiver in the Tom Petters case-have resolved the issue.

A conflict involving taxes on millions of dollars in ill-gotten gains tied to the Tom Petters case has been resolved, according to a report by the Pioneer Press.

The Minnesota Department of Revenue and the IRS had identified tax liabilities dating back to 2004 in the estates of Petters, Deanna Coleman, and four other co-conspirators in a $3.65 billion Ponzi scheme. As a result, the state and the IRS had sought about $2.5 million in assets controlled by Doug Kelley, the court-appointed receiver in Petters' case.

As of last summer, Kelley held about $10 million from those estates-funds that were subject to a forfeiture order and that are eventually expected to return money to victims of the fraud, the St. Paul newspaper reported. (The money represents only a portion of the total funds recovered in the case.)

According to the Pioneer Press, an attorney for Kelley revealed in recent court documents that the IRS and the state have agreed to resolve the issues tied to the tax liabilities. The state and the IRS reportedly agreed that they won't hold Kelley personally liable for taxes on the assets he's turned over to the court in the forfeiture action. The two entities could still seek to put a lien on the assets that were forfeited, although any claim would have to be approved by U.S. District Judge Richard Kyle, the Pioneer Press reported.