DOJ suing Lane Grigsby and wife over ‘erroneous’ $750,000 tax refund
The U.S. Department of Justice is suing Cajun Industries founder and Chairman Emeritus Lane Grigsby and his wife for more than $750,000 for an income tax refund the government says the Grisbys were not entitled to receive.
According to a lawsuit filed Wednesday in U.S. District Court for the Middle District of Louisiana, the refund was issued for the 2013 tax year and was based on more than $1.34 million in research and development tax credits Cajun claimed for the year.
Because Cajun Industries is an S corporation, its owners are able to claim such credits on their personal tax returns.
Court documents say the Grisbys had already filed a tax return for 2013 but filed an amended return in 2017 claiming the R&D credits after a consulting firm hired by Cajun—Alliantgroup—performed a tax credit study for the company for the years 2012-2016.
The suit says Cajun—and, therefore, the Grigsbys—were ineligible to receive the credits because “Cajun claimed the credits for activities that did not constitute qualified research under (the law). Cajun did not engage in technological or scientific research to design and/or create new or improved business components of Cajun.”
The suit also says the credits are ineligible because Cajun “did not maintain, and did not claim and compute research credits with sufficient documentation and substantiation of the percentage of overall work time that specified employees spent performing or supervising performance of allegedly qualified research ….”
Though attorneys for Grigsby have not yet filed a formal response, Lane Grigsby says he will fight the lawsuit and has documentation to prove the credits were legitimate and that the refund he received does not have to be returned.
“The people who prepared the documents say the records Cajun has are as clean as any they have ever seen,” he says.
Grigsby suggests the IRS is overreaching and that he may be targeted because of his outspoken, conservative political views, noting that other partners in his business also received the R&D credits for 2013 and haven’t gotten any push back for it.
“It’s typical of the way our government abuses its citizens,” he says. “I know the IRS has been used against other conservative people. I know other people who got this same credit and theirs was allowed. Why was mine stopped? Why me? Maybe because I do raise my mouth a little too loud.”
Grigsby says he is not concerned about the suit, adding, “I send the government way more money than they send me.”