The Bellosguardo Foundation may have to sell the $85 million it received in the 2013 settlement of copper heiress Huguette Clark's estate if the does not waive millions of dollars in back taxes, the reports.
Unless the IRS waives — on the grounds that the foundation is a nonprofit organization, as are other charities involved in the estate settlement — between $16 million and $18 million in penalties on gift taxes that Clark's attorney and accountant neglected to pay, the Bellosguardo property in Santa Barbara, California, may have to be sold, people with knowledge of the situation told the Independent. Mired in a dispute with the executors and beneficiaries of the heiress's will after her death at the age of 104 in 2011, Clark's relatives originally had pushed for the mansion to be sold. When what had been a $300 million estate was finally settled, the foundation was awarded the property but left with only $4.7 million in cash, with Clark's relatives receiving $34.5 million and lawyers' fees eating up much of the rest.
The IRS has not indicated whether it plans to collect or waive the penalties. "The board is still awaiting word from the [New York] public administrator on whether the IRS will waive the tax penalties," said Santa Barbara mayor Helene Schneider, who, under the terms of the settlement, was given the right to choose most of the foundation's board members. The board, which was named in October 2014, has the task of determining how the property will be used. "The board is also talking about potential partnerships with other arts institutions," said Schneider.
"Once the IRS issue is successfully resolved and the full potential of the property as a world-class institution becomes clearer," board chair Dick Wolf told the Independent, "the board will move forward with finding a permanent executive director who will guide the foundation in achieving its full promise."