New York City developers could owe millions in unpaid taxes

Oct.October 04, 2011 12:10 PM

New York City real estate developers may be defrauding the government out of hundreds of millions of dollars every year in unpaid taxes, a retired Internal Revenue Service agent told NY1.

“If I were a resident of New York, I would definitely be outraged,” Jerry Curnutt, the former IRS agent said. “These folks know the rules, and to not pay what you owe is egregious.”

Curnutt said many real estate partnerships in particular are avoiding the taxes they owe. If an individual decides to partner up with someone to develop a property, he said, they get a loan from a lender. They then deduct a portion of that loan each year when they file taxes. However, when they sell the building, they owe the government the cumulative amount they saved from the deductions.

“We’re talking about unreported tax gains in many cases in well in excess of $100 million,” he said. [NY1]

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