Former stock exchange chief faces £5.1m tax evasion bill

US tax collectors have ex-New York Stock Exchange chief Dick Grasso firmly in
their sights, after hitting him with a $10m punishment for alleged income tax

New York State’s
Department of Taxation
targeted Grasso after claiming he failed to pay
the correct amount of income taxes in 2002 and 2003 while living in the Tribeca
district of the borough of Manhattanand. It has fined him an initial $1.8m for

Residents of the five boroughs of New York City in the top tax bracket must
pay 3.6% income tax on top of a 6.85% state tax if they live in those homes for
more than 183 days a year. New York State residents who live outside the City
need pay the state taxes only. 

Grasso, ousted as the NYSE’s chief executive in 2003 after his $190m deferred
compensation package became public, has stated that his main residence was
outside New York City on Long Island and has claimed that he only spent 170 days
in Tribeca.  

In a letter contained in the court papers to the New York supreme court in
December his lawyer Irwin Slomka said: ‘I am particularly surprised by the
decision to impose nearly $1.8m in penalties in this case. Mr Grasso, a
domiciliary of Locust Valley,Long Island, clearly had reasonable cause for not
filing as a New York City resident in both 2002 and 2003.’

Mr Grasso told the New York
that he moved out of the city in 1974 and he was confident that he had
done nothing wrong. ‘Fortunately, the year in question, 2003, is the one where
the NYSE fired me. We went back and checked -I spent 170 days in the city. If
they had dragged out my dismissal, I would have had to plead no contest.’

Once the interest on the fine and the payments themselves are factored in, he
could be facing a penalty closer to $10m.

Further reading:

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Football manager keeps job despite tax

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