Sotheby’s faces trial for helping art collector evade taxes


A New York judge has denied a Sotheby’s motion to dismiss a lawsuit brought by the state’s attorney general against the auction house that accuses it of helping a collector avoid sales tax on 27 millions of dollars worth of works of art.


The lawsuit, filed in November, alleges that between 2010 and 2015, Sotheby’s filed fraudulent documents to make a ‘valuable client’ appear as an art broker rather than a collector, saving them money. million on municipal and state taxes.

Sotheby’s tried to have the case dismissed in December, arguing that the company was not guilty since only a small number of employees knew of the wrongdoing.

In his ruling on Tuesday, the judge said a “key client manager” had visited the client’s apartment to view the art, and it was not disqualifying that Sotheby’s accountants who reviewed the forms fakers didn’t know they weren’t genuine, according to Reuters.

Sotheby’s did not respond to requests for comment.

Key Context

Although the client was not named in the lawsuit, it is related to Porsal Equities. Two years ago, Porsal agreed to pay $10.75 million to settle charges against him for dodging millions in taxes by abusing resale certificates, which are intended for resellers and allow them to claim tax exemptions. Now Attorney General Letitia James is going after the auction house itself, alleging that at least 12 Sotheby’s employees knew the client was buying art for himself and some even went to the customer to help hang the work. The collector would not have paid taxes on the works of renowned artists like Jean-Michel Basquiat and Anish Kapoor. Last year, a Sotheby’s spokesperson said Forbes that they “vigorously refute the unsubstantiated allegations”.

Large number

34. This is the number of works of art on which the client allegedly did not pay taxes.

Further reading

New York AG alleges Sotheby’s helped client avoid sales tax on $27 million worth of artwork (Forbes)

Sotheby’s auctions historic eyewear with diamond and emerald lenses (Forbes)

Why Maggi Simpkins is set to break records with a million dollar ring at Sotheby’s (Forbes)

Norma D. Ross