Deloitte $500M ‘foul’ in court

A Deloitte LLP unit allegedly promised a tax plan under which former Detroit Pistons owner Bill Davidson would “win if he lived, or win if he died.”

It didn’t work out that way. Four years after the 2009 death of the multibillionaire, his estate was hit with a $2.7 billion tax bill, says a lawsuit filed in New York state court.

The estate sued Deloitte Tax Thursday to recover $500 million in taxes, fees and penalties.

Deloitte Tax failed to disclose the risks of the tax plan that it recommended to Davidson in order to secure him as one of its “marquee clients” who could generate large fees and serve as a “showpiece” to promote its services to other wealthy people, the estate said in the lawsuit.

The Internal Revenue Service sent Davidson’s estate the $2.7 billion tax bill in May 2013 and, after negotiations, the estate is obligated to pay more than $457 million, in addition to $168 million in estate taxes and $82 million in gift taxes already paid, says the suit.

“In its zeal to secure Mr. Davidson’s business, Deloitte Tax failed to disclose the numerous material risks associated with the plan that it advocated,” Davidson’s estate said in the suit, filed in Manhattan.

Deloitte didn’t immediately respond to multiple telephone messages seeking comment.