Detroit newspaper claims Reade Seligmann owes $6.5 million in taxes -- possibly from Duke settlement. Lawyer says it's an error.

FC posts this news article from the Feb 24 Detroit News. For some reason the headline said "Controversial Duke lacrosse player...." It should have said "Awesome Duke lacrosse player..."

By Robert Snell / The Detroit News

Nearly four years after receiving an undisclosed settlement from Duke University, Reade Seligmann, one of three lacrosse players exonerated in a racially charged rape case, owes the IRS almost $6.5 million in taxes, according to public records. (( There was no rape. So how was it a rape case?? ))

The 24-year-old New Jersey native's lawyer disputes the tax bill, however.

According to a tax lien filed Feb. 17 in New York City, Seligmann owes $6,492,377 in income taxes from 2007. That's the same year Seligmann reached the settlement with Duke.

The amount of the settlement has never been disclosed and is an enduring mystery in one of the most divisive scandals in college sports history. (( This makes you think all this was a sports scandal. Nothing could be further from the truth ))

Tax lawyer Jeffrey Freeman of Birmingham, Mich., said someone would have to make about $20 million in one year to generate a $6.5 million tax bill.

The Detroit News asked Seligmann lawyer Richard Emery if the former Duke player received $6.49 million from the university or if the amount represented the taxable portion of the settlement. He also was asked if the Duke settlement was the basis of the tax lien. Emery said "no" and that the amount was inaccurate.

"We are trying to get to the bottom of this mistake," Emery wrote in an e-mail to The Detroit News. "We are retaining tax counsel to figure this out. The lien will be withdrawn shortly. It is in error."

The IRS does not comment about an individual's taxes.

In general, people don't have to pay taxes on settlements stemming from personal injuries, said Freeman, who specializes in civil and criminal tax cases. People generally have to pay taxes on settlements stemming from emotional distress, depression and other symptoms.

The $6.49 million tax lien gives the government a legal claim to all of Seligmann's property, everything from vehicles, to homes and income.

The lien lists Seligmann and New York City accountant David Weiss, with whom the Seligmann family consulted several years ago, Emery said.

"This is quite obviously a mistake..," Emery said. "We will get it corrected. The whole thing is very weird and makes no sense." Emery would not elaborate on the mistake.

"It's just a flat-out mistake," Emery wrote.

Weiss, whose name and Manhattan office address is listed on the tax lien, did not return a phone call or e-mail seeking comment.

Emery represents Seligmann in a federal lawsuit against the city of Durham, N.C. The case is pending.

Seligmann was suspended after being indicted in spring 2006 on charges of rape, kidnapping and sexual offense. The charges came after a woman told police she was attacked while working as a stripper at a March 2006 team party.

State prosecutors, who inherited the case from Durham County prosecutor Mike Nifong, dropped all charges. (( Not only dropped charges, but declared the lax players "innocent."

Nifong resigned amid allegations he withheld evidence, lied to the court and made misleading and inflammatory comments. (( Wow. Nifong resigned because he was disbarred. He served one day in jail.))

After being exonerated, Seligmann and his two teammates reached a settlement with Duke in June 2007. The university settled to "eliminate the possibility of future litigation," according to a statement issued that month.

After leaving Duke, Seligmann enrolled at Brown University, where he played lacrosse, and graduated last year. He reportedly is studying law at Emory University in Atlanta.

From The Detroit News: http://detnews.com/article/20110224/NATION/102240477/Controversial-ex-Duke-lacrosse-player-owes-IRS-$6.5M#ixzz1EuVEhYrl

Total disclosure: Richard Emery has also represented FC in litigation. This was many years ago and totally unrelated to anything Duke, or FC's journalistic or legal career.