The letter, by University of Texas Law School Professor Calvin Johnson, focuses on two trusts Romney has set up: one for his children, which is worth over $100 million, and an $87 million retirement trust. These trusts have grown at an enormous rate -- Johnson notes that they have been more than 10 times as profitable as Warren Buffett's investments over the same time frame. Johnson writes that Romney may have played fast and loose with the law by undervaluing Bain Capital assets that were contributed to the trusts. By undervaluing the assets, Romney could avoid paying gift taxes.
Quoting from the letter,
Misvaluation of that order of magnitude is subject to a penalty of 400 percent of the tax at issue, without regard to the subjective state of mind of the contributor. For Romney, the misevaluation penalty would be many tens of millions of dollars.