A Denver judge has dismissed a lawsuit filed by Phil and Nancy Anschutz seeking an $8 million tax refund at the billionaire couple’s request, indicating the case was likely settled with the state.
The Anschutzes filed a motion last week asking that the case, which was revived late last year by the Colorado Court of Appeals, be dismissed with prejudice — meaning that it can’t be refiled — and that both they and the Colorado Department of Revenue be required to cover their own attorneys’ fees. The motion didn’t elaborate on why the Anschutzes were dropping the legal action, filed in April 2021.
The state did not oppose the motion and the request was granted Monday by Denver District Court Judge J. Eric Elliff.
Lawyers for the couple didn’t respond to multiple Colorado Sun requests for comment this week or last. The Department of Revenue declined to say whether there was a settlement reached or if there was another reason the case was dismissed.
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“The court found in the taxpayer’s favor and that resolves the case for us,” said Daniel Carr, a Department of Revenue spokesman.
Several lawyers who reviewed the case at The Colorado Sun’s request said the quick dismissal indicated there was likely an agreement made between the Anschutzes and the state.
“I think there probably was a settlement,” said Stan Garnett, a former district attorney in Boulder County who now works in private practice on civil and criminal cases.
The Anschutzes argued that changes to the federal tax code made through the CARES Act, Congress’ 2020 COVID-19 response bill, entitled them to the big refund dating back to the 2018 tax year. The CARES Act changed the definition of federal taxable income, and they contended that since Colorado’s tax code follows federal definitions, they should get the money back.
The CARES Act suspended limits for the 2018, 2019 and 2020 tax years on deductions for “excessive business losses.” That’s the change under which the Anschutzes were seeking their refund.
The case was dismissed by Elliff in August 2021, but the Anschutzes appealed the ruling to the Colorado Court of Appeals, which in November reversed the dismissal and ordered Elliff to revisit the case.
The legislature’s nonpartisan Legislative Council Staff, when presenting its quarterly economic and tax revenue forecast to state lawmakers in March, warned lawmakers that the case could have broad financial consequences.
“The state will be required to pay the state income tax refunds sought by the (Anschutzes) and those sought by similarly situated taxpayers, and this forecast incorporates a downward adjustment of $40 million for individual income tax revenue in FY 2022-23.”
The staff said the tax revenue hit may be even larger, and poses a “significant downside risk to the income tax revenue outlook.”
The Anschutzes are among the nation’s wealthiest people. Their net worth is estimated to be nearly $11 billion. The pair’s Colorado assets include The Broadmoor hotel and resort in Colorado Springs, as well as several media outlets, including The Gazette, based in Colorado Springs, The Denver Gazette and Colorado Politics.