In his decision, U.S. District Judge Steven Merryday criticized the tax code as "forbidding arcana" and "intractably muddled," the Tampa Bay Times reported Monday.
The IRS had not disputed that Harold "Hal" Steinbrenner, managing general partner of the New York Yankees, had the partnership-related refund coming. However, the agency said the two-year statute of limitations on the refund had expired. Steinbrenner's lawyers said the IRS should have applied a three-year statutory limitation because of circumstances surrounding the refund.
Steinbrenner had paid nearly $1 million in additional taxes after an IRS audit of a Yankees Holdings company for tax years 2001 and 2002.
The bill affected the tax liabilities for the Steinbrenner family trust, but the IRS said the loss couldn't be distributed to the beneficiaries for 2002. The trust could amend its return for 2001, which resulted in Steinbrenner getting the refund.
Two years the IRS sued, saying the refund shouldn't have been paid.
The judged sided with Steinbrenner and his wife on Friday.
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