A former Liberty Property manager in Minnesota has filed a lawsuit against the IRS, saying the agency rejected his application for the agency’s “Liberty Property Management and Recovery Assistance Program” in 2012 after the manager’s company “came to believe that [the IRS] intended to impose a tax on the management and administration of Liberty Property Property Management.”
In the lawsuit, filed Monday, attorney Michael G. Bierut argues that the IRS “has not been acting in a lawful and consistent manner” when it denied Liberty’s request for the program.
The agency “did not conduct a fair and impartial investigation of the case and did not present reasonable grounds to believe” that Liberty was attempting to evade its taxes, according to the complaint.
Liberty’s application was rejected because it failed to “prove that the applicant has a legitimate purpose for seeking and obtaining such assistance, including but not limited to the maintenance of property rights, to recover from Liberty property in the event of the loss of such property, and to secure the continued operation of Liberty property,” the lawsuit says.
Liberty Property is the property management firm of the Rev. Jesse Jackson, who is black.
Biersut’s office said the agency “does not comment on pending litigation.”
Liberty Property Manager’s Office spokeswoman Susan Johnson said in a statement that the agency did not respond to a request for comment.
In 2012, Liberty Property received a request from the agency for assistance in finding the rightful owner of property that was lost in a hurricane.
The request for help came after the company lost the Liberty Property property to Hurricane Irene.
Liberty Properties asked the IRS to reimburse the company for “reasonable expenses incurred” by the company “to retrieve and recover the property from Liberty Property,” according to a copy of the application the company filed with the IRS.
Liberty requested a 10% tax refund for the cost of recovery and a 10.25% tax credit for any taxes that Liberty had to pay, according the application.
After Liberty was approved for the grant, it was allowed to “hold the property” for another year, according its application.
Bersut filed the lawsuit against Liberty on behalf of two Liberty employees, as well as a Liberty property management company, Liberty’s own subsidiary, Liberty Inc., and the IRS in federal court in St. Paul, Minn.
Liberty is seeking a preliminary injunction that would stop the IRS from taking Liberty’s property and to force the IRS into compliance with the law.