New York Attorney General Announces $6.25 Million Settlement with Sotheby’s Over Tax Fraud
ALBANY, N.Y. (NEXSTAR) — New York Attorney General Letitia James announced a $6.25 million settlement with Sotheby’s, the iconic New York City auction house, for helping clients avoid millions in sales taxes.
Background of the Case
From 2010 to 2020, Sotheby’s let clients claim phony tax exemptions on millions of dollars in art purchases. The company told clients to pretend to buy art for resale when they were actually curating their own personal galleries, which allowed them to skip sales tax.
Investigation and Findings
According to the Attorney General’s Office, Sotheby’s employees knew that some buyers were not art dealers, but still provided or completed resale certificates for clients who were buying art as gifts or for their private collections. In one example, a major client used tax exemption forms to buy $27 million in art this way between 2010 and 2015.
Previous Settlement
That collector’s company already agreed to repay over $10 million in taxes and penalties in an earlier settlement brokered by James’s office.
Settlement Agreement
Under the settlement agreement, Sotheby’s has to commit to major procedural changes beyond the millions in penalties. The company has to train employees on New York tax law and make it harder to break the law in this way in the future.
Quote from the Attorney General
“No one should be allowed to cheat the system and escape paying the taxes they owe,” James said when announcing the settlement on November 14. “When people break the rules, we all lose.”
Conclusion
The settlement marks a significant victory for the New York Attorney General’s Office in its efforts to combat tax fraud. The agreement not only holds Sotheby’s accountable for its actions but also ensures that the company will take steps to prevent similar fraud in the future.
FAQs
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What is the settlement amount?
$6.25 million
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What was the period of time during which Sotheby’s committed tax fraud?
From 2010 to 2020
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What was the total amount of art purchased using phony tax exemptions?
Millions of dollars
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What changes must Sotheby’s make to prevent future tax fraud?
The company must train employees on New York tax law and make it harder to break the law in this way in the future
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What was the previous settlement amount?
Over $10 million in taxes and penalties
