Miami Couple Dispute $5.8M Tax Bill for Duty-Free Retail Biz

Travel Retail Group Holdings LLC owners argue IRS miscalculated their 2016 income

Published on Feb. 13, 2026

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Married couple Bernard and Juliette Klepach, the owners of Miami-based global travel retailer Travel Retail Group Holdings LLC, are disputing a $5.8 million tax deficiency from the IRS. In a US Tax Court petition, the Klepachs argue the agency overstated their taxable income by $19.1 million through adjustments tied to a foreign subsidiary owned by their S corporation.

Why it matters

This case highlights the complex tax issues that can arise for owners of international businesses, especially those involving foreign subsidiaries. The outcome could set a precedent for how the IRS calculates income and tax liabilities for similar companies.

The details

According to the petition, the IRS improperly calculated the Section 956 investment in US property for Travel Retail Group Holdings, which led to the $19.1 million overstatement of the Klepachs' taxable income. Section 956 governs the treatment of a controlled foreign corporation's investment in US property.

  • The Klepachs filed their US Tax Court petition on February 6, 2026.

The players

Bernard and Juliette Klepach

Married couple who are the sole shareholders of Travel Retail Group Holdings LLC, a Miami-based global travel retailer.

Travel Retail Group Holdings LLC

A Miami-based global travel retailer organized as an S corporation, of which Bernard and Juliette Klepach are the sole shareholders.

Internal Revenue Service (IRS)

The U.S. federal agency responsible for administering and enforcing federal tax laws, which issued a $5.8 million tax deficiency to the Klepachs.

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What’s next

The US Tax Court will hear arguments from both the Klepachs and the IRS to determine whether the agency properly calculated the couple's 2016 taxable income.

The takeaway

This case underscores the importance for multinational business owners to carefully navigate complex international tax rules and work closely with tax professionals to ensure compliance and avoid disputes with the IRS.