Waddell Ex-CEO Challenges Kansas City Taxes

Keith A. Tucker, who resigned as chief executive officer of Waddell & Reed last year, is looking to avoid paying $1.23 million in earnings taxes to Kansas City, where the company is headquartered and where he worked between 1992 and 2005, The Kansas City Star reports.

Although Tucker and his wife had owned and lived in an historic mansion for seven years and, before that, in a condominium for nearly seven years, and did not move to Dallas until after he resigned from Waddell & Reed, he maintains that Dallas, where he has also long owned property, is his true home. His attorney adds that the city has "no definition anywhere of what a resident is." The tax in question is the 1% earnings tax on the $74.3 million Tucker earned between 1999 and 2003.

Tucker sued the city 16 months ago under the name "John Doe," in order to protect his privacy, but last month, the circuit judge overseeing the case overturned that decision. Because Kansas City requires taxpayers to pay taxes before contesting them, Tucker has already made the payment. The city will be presenting its case on Oct. 23.

In addition to their tax woes in Kansas city, the Tuckers have been in a battle with the Internal Revenue Service since 2004 over tax deductions they took in 2000. The government says the $39.2 million in deductions they took were not legitimate and that they owe $21.7 million in taxes and penalties. Tucker also has a lawsuit pending against the IRS.

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