Ex-Enron Exec’s Widow Loses Bid to Recoup Taxes

(CN) - The widow of a former Enron executive lost her bid in U.S. Tax Court to recoup $258,000 she claimed the Internal Revenue Service owed her and her late husband's estate.

Former Enron vice chairman and chief strategic officer James Baxter, who died in 2002, withdrew $1.5 million from Enron's deferred compensation plan, which the company booked as non-employee compensation. The IRS later determined that the payout was, in fact, wages. In 2004, Enron was forced to pay $500,000 in withholdings, which Baxter's estate then paid back to Enron.

Baxter's widow, Carol Whalen, later tried to claim a $258,000 credit on her 2004 taxes, arguing that as the IRS had already been paid by Enron for the 2001 withholdings and, as she had paid taxes on the payout in 2001, the IRS was taxing the same income twice.

The court agreed that the IRS had received double payments on the same income, but found that the deadline to claim refunds had expired on Whalen's 2001 taxes. Further, she is not entitled to have her overpayment credited to her 2003 and 2004 tax deficiencies, because the IRS conceded that she didn't owe taxes for those years.

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