Fitzgerald Seeks Summary Judgment in $83 Million Tax Case

Fitzgerald Glider Kits
Fitzgerald Glider Kits headquarters in Crossville, Tenn. (Fitzgerald Glider Kits)

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Attorneys for the nation’s largest glider truck manufacturer have asked a federal judge for permission to seek a partial summary judgment to block an attempt by the IRS from collecting $83 million in back taxes and penalties.

The IRS wants money from Fitzgerald Truck Parts and Sales for failure to charge buyers a 12% excise sales tax for retail glider sales from 2012 to 2014.

In a legal brief filed May 12 in federal district court in Tennessee, Fitzgerald said that a 1988 federal law contained a “safe harbor” provision that exempted charging the excise tax for glider trucks if they cost 75% or less than the retail cost of a comparable new tractor.

“FTPS submits that the court’s resolution of this threshold legal question involving the application of the safe harbor statute will serve to significantly narrow the focus of discovery and shape the course of the litigation, making it more efficient and conserving the court’s and the parties’ resources,” Fitzgerald said.


A glider kit is installed in a Peterbilt truck. (Fitzgerald Glider Kits via YouTube)

Fitzgerald, a family-owned business that has built gliders since 1989, also has argued in its 2019 lawsuit that the IRS has in past years not required the excise tax to be charged for glider sales.

The agency has countered that the safe harbor math test does not apply to Fitzgerald — even if the repair cost does not exceed the 75% threshold. A glider does not “extend the useful life of an existing vehicle, but instead was fabricating a truck that did not exist prior to the fabrication,” the government said.

A glider kit is an assemblage of new tractor parts that typically include a cab, frame, sheet metal, mounting brackets, steering gear, front axle, front wheels and front tires and sometimes a rear axle, rear wheels and rear tires, matched to an existing engine or transmission.

Although Fitzgerald and the government have been sparring in court for more than a year, they are in settlement discussions and must file a status report on the negotiations by June 15.

In court documents, the company alleged it was being targeted by the IRS, which it said has not assessed excise taxes against all dealers that sold gliders during the relevant tax periods, an allegation that government attorneys have denied.

However, court records show that the IRS conducted an examination for each of Fitzgerald’s tax quarters from 2012 to 2014. In February 2017, Fitzgerald paid the excise tax on one glider for each of the relevant tax periods, for a total of $167,000. But on April 10 and April 17, 2017, the IRS assessed taxes, penalties and interest against Fitzgerald on thousands of gliders sold during the relevant tax periods, raising the assessment by millions of dollars. In the government’s most recent counterclaim, filed last summer, the IRS said Fitzgerald’s bill had gone from $64 million to $83 million.

Last summer, government attorneys asked a federal judge to dismiss portions of the Fitzgerald lawsuit. But in a July 2019 memorandum order, Chief U.S. District Judge Waverly Crenshaw Jr., of the Middle District of Tennessee, rejected the request. In his opinion, Crenshaw called the then-$64 million tax bill “a whopping assessment” for the three-year period between 2012 and 2014.

“The taxes, of course, were not collected at the time of the sale of the glider trucks, and it is highly unlikely that truckers or fleet owners would willingly pay taxes on trucks that were purchased between four and six years earlier,” Crenshaw wrote.


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Fitzgerald was at the center of a controversy in 2018 when a Tennessee Tech University study funded by the company was found to involve research misconduct. A subsequent TTU investigation found that university researchers erroneously concluded that emissions from glider trucks are as clean or cleaner than those from newer trucks.

The TTU study results were referenced in an Environmental Protection Agency 2017 proposed rule to buttress the repeal of an Obama-era rule limiting the production of glider trucks by each manufacturer to 300 per year. However, an EPA study released only days after the proposal concluded that glider trucks can emit 43 times more nitrogen oxides and 55 times more particulate matter than trucks in compliance with newer federal emissions standards.

Since then, EPA has left the Obama administration rule limiting glider production numbers standing, not taking action on the proposed repeal rule put forth by former EPA Administrator Scott Pruitt.

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