Tax Court serves as umpire in Steinbrenner case


In baseball, teams usually win or lose the game on the field. Here is a situation where the outcome was decided by the umpires – the Tax Court to be exact.

The issue in the case was whether Steinbrenner’s 2001 refund claim had to be filed within two years of the settlement, which in turn depends on whether the 2001 overpayment was attributable to a partnership item or nonpartnership item (United States v. Harold Z. Steinbrenner 111 AFTR 2d カ2013-805, June 7, 2013).

Harold “Hal” Steinbrenner, the son of George Steinbrenner and part owner, co-chairperson and general partner for the New York Yankees, is also a beneficiary of a family trust that is an indirect partner in YankeeNets LLC through an intervening partnership, Yankees Holdings, LP.

The umpiring crew on the district court bench conferred and ruled in favor of Steinbrenner.

The district court granted summary judgment in favor of Steinbrenner that his refund claim was properly brought within two years of payment, rejecting the IRS’s attempt to recover the refund on grounds of untimeliness. The IRS lost its argument with New York Yankees owner Hal Steinbrenner over the definition of “two years.”

Normally, a claim for credit or refund of an overpayment must be filed within three years from the time the return was filed or two years from the time the tax was paid, whichever period expires later. However, different rules apply for refund claims with respect to “partnership items.” The tax law provides a separate limitation period for a number of situations, including settlements.

So Steinbrenner and the Yankees were able to retain their winning ways – even against the IRS.

“Hating the Yankees is as American as pizza pie, unwed mothers, and cheating on your income tax.” – Mike Royko, Chicago newspaper columnist