The Wylys have also argued that the government’s proposed penalties for failure to file, totaling more than $940 million, are “grossly disproportional” to the alleged infractions and are constitutionally excessive.
Blacker, the IRS lawyer, said the securities fraud for which the Wylys were found liable in the New York case was carried out “to attain the tax benefits of the offshore system.”
“This was all tax-related,” he said.
The case is In re Samuel E. Wyly, 14-bk-35043, U.S. Bankruptcy Court, Northern District of Texas (Dallas).