By: Derek Hawkins//February 3, 2016//
WI Court of Appeals – District IV
Case Name: Great-West Life & Annuity Insurance Co., et. al. v. Wisconsin Department of Revenue
Case No.: 2013AP2605; 2013AP2765
Officials: Kloppenburg, P.J., Lundsten and Higginbotham, JJ.
Practice Areas: Tax Assessment
Donald Bottolfson won the Wisconsin “Megabucks” lottery (the “prize money”) in 1994. The primary issue in this case is whether the Wisconsin Tax Appeals Commission properly denied the request of Great-West Life & Annuity Insurance Co. to refund money withheld by the Wisconsin Department of Revenue (DOR) from prize money payments made to a trust, the Bottolfson 1997 Trust, which was created to receive the prize payments. DOR withheld the money because of back taxes owed by Bottolfson, who at the time the money was withheld, was a beneficiary of the Trust. For reasons that will become clearer below, to resolve this issue requires us to determine whether Bottolfson’s sale to Great-West of the income stream Bottolfson would have received from the Trust constitutes an assignment in violation of WIS. STAT. § 565.30(6) (1997-98). 2 If we conclude that the sale of the income stream violates sub. (6), we must determine whether DOR is equitably estopped from objecting to the assignment. For the reasons that follow, we conclude that Bottolfson’s sale of the income stream constitutes an assignment of the right to a lottery prize in violation of WIS. STAT. § 565.30(6), and, turning to Great West’s alternative argument, further conclude that DOR is not equitably estopped from objecting to the assignment. Accordingly, we reverse the circuit court and affirm the commission