Buffett Sues The IRS: An Amazing Situation

 |  Includes: BRK.A, BRK.B
by: Ira Stoll

Warren Buffett, who has been running around complaining that the government should "stop coddling the super-rich" and should raise taxes, is reportedly suing the IRS to avoid $643 million in taxes that the government says Berkshire Hathaway's (NYSE:BRK.A) NetJets subsidiary owes the government for failing to collect ticket taxes from NetJets customers (who include Mr. Buffett himself). The suit against the IRS is filed by NetJets Large Aircraft Inc., not by Mr. Buffett himself, but Mr. Buffett is CEO of NetJet parent Berkshire and its largest individual shareholder.

Neither the Bloomberg News article, which is by Don Jeffrey and was edited by Charles Carter and Andrew Dunn, nor the Wall Street Journal story, by Erik Holm, comment on the obvious irony or inconsistency of Mr. Buffett running around claiming the government should raise taxes on other rich people while going to the unusual length of suing to avoid paying taxes the government says his company owes on behalf of its private-jet-using clients. When the tax man doesn't coddle Mr. Buffett, he sues! Whatever the merits of the underlying case, and whatever distinctions might be made between Berkshire the company or its customers and Mr. Buffett as an individual, it's still an amazing situation. Or maybe not so amazing to those of us who have argued all along that the tax increases Mr. Buffett favors would barely apply to him and would actually improve his position relative to his competitors. When it comes to a tax that actually hurts him or his company, he's willing to sue so that he keeps getting coddled.