Nearly three years after the U.S. Department of Justice sued the founder of Adell Broadcasting over a multimillion claim linked to alleged unpaid gift tax liabilities, a settlement is on the way, court documents confirm.
A video conference is schedule for May 29, during which Kevin Adell and DOJ representatives will appear with their respective legal teams in front of Magistrate Judge Elizabeth Stafford of the U.S. District Court for the Eastern District of Michigan’s Southern Division.
By May 15, the DOJ and Mr. Adell must each submit exchange statements with a brief description of the background and nature of the case, the party’s perceived strengths, and a statement identifying each cause of action at issue and the remedies available under each of those causes of action.
Then, within the following week, counsel must meet and confer in good faith, as spelled out by the court.
The case, filed in April 2023, is focused on civil tax liabilities, with a $9,999,000 demand. And, it focuses on taxes related to the estate of the late Franklin Adell, who died in August 2006 and is the father of Kevin Adell and two siblings.
Reached by RBR+TVBR for comment, Adell declined to discuss the matter, noting that the settlement terms will not be made public. He did note, however, that the tax is not his but his father’s and that he resigned as the personal representative for Franklin Adell’s estate shortly after his passing more than 20 years ago.
The DOJ’s suit also named Ralph Lameti, trustee of the Orchard Lake Property Trust; and the Treasurer for Oakland County, Mich., as defendants. In the Justice Department’s view, it went to court to collect unpaid federal estate and gift tax liabilities of the Franklin Adell estate, claiming that Kevin Adell is personally liable.
While Adell paid $8,094,524 to the IRS, a federal Tax Court in April 2018 determined that his total tax liability was $12,403,288. There has been no payment of any of the unpaid balance of $4,308,704, dating to May 2009. That triggered interest and penalties, and as of April 23, 2023, $9,775,326.65 was the amount the IRS sought from Kevin Adell — plus additional interest and “statutory additions.”
There is also the matter of a Form 709 Gift Tax Return. In November 2008, Kevin Adell reported $2,889,108 in gift tax owed. An audit by the IRS found, in its view, that Mr. Adell owed an additional $71,562 to the government. That was in June 2011. As of April 23, 2023, that owed amount ballooned to $8,178,714.47 due to interest and penalties.
Adell Broadcasting is the licensee of WADL-TV and WADL-AM in the Detroit market and owns MVPD-distributed African American-targeted non-secular offering The Word Network.
— Adam R Jacobson reported on this story from Palm Beach, Fla. Additional reporting by RBR+TVBR in Northville, Mich., and in Washington, D.C.
