Sam Zell just might be the Worst Person in Chicago.
He's already under investigation by screwed creditors examining the details of his kinky and highly leveraged purchase of the Tribune Company, which he restructured in such a way as to avoid paying taxes.
Now he's working on an arrangement to sell the Cubs that would do something similar, costing the U.S. Treasury about $300 million -- or 10 times Milton Bradley's outlandish salary.
At least one prominent tax expert says the IRS will probably challenge the Cubs deal.
Will it never end?
In addition to the Grave Dancer, which references Zell's knack for spotting undervalued assets given up for dead, Zell's tax avoidance schemes have led master business journalist Allan Sloan to give him a new nickname : the Artful Dodger.
That's for his ability to dodge taxes.
But it's not funny.
Zell finds ways to stretch provisions in the law beyond anything comprehended by tax code writers to pad his already obscenely bulging wallet - and leaves the rest of us holding the bag.
Sam Zell doesn't just hate taxes; he seems to hate people as well.
Steve Rhodes is the proprietor of The Beachwood Reporter, a Chicago-centric news and culture review.
IRS Challenge To Cubs Sale Might Add To Tribune Co. Liability
BY DAVID ROEDER
The Sam Zell-orchestrated sale of the Chicago Cubs probably will be challenged by the IRS, a prominent tax expert said Tuesday.
Robert Willens said an IRS probe should not upset Tribune Co.'s plan to sell the team and related broadcasting assets for $845 million to the Ricketts family. That's because any IRS action would follow an audit that might not occur until 2011, long after the team is expected to change hands.
But a fight with the IRS could expose Tribune, which is trying to emerge from bankruptcy, to a tax liability of $300 million.
The Cubs sale was structured to save about $300 million in capital gains taxes. It is set up as a partnership with Tribune keeping a 5 percent stake.
"The IRS is not favorably disposed to leveraged partnerships and this is about the highest profile leveraged partnership we've had," said Willens, who runs a consulting firm and publishes a tax newsletter.
In response, Tribune issued a statement saying, "The Cubs transaction, while not yet concluded, meets both the letter and the spirit of the tax law."
Tribune's lawyers are expected to point to the company's guarantee to the Ricketts' debt from the deal as evidence of a true partnership. But Willens said a guarantee from a bankrupt company is meaningless.