Altria Group, Inc. seeks further review of a federal jury decison to reject a $24 million tax refund..






July 11, 2009 - A federal jury has rejected a $24 million tax refund claim filed by tobacco company Altria Group Inc. The United States Internal Revenue Service (IRS) challenged tax deductions the Richmond, Va.-based company made in 1996 and 1997 in connection with leveraged lease transactions. The company claimed the ownership structure of the properties allowed it to take certain tax deductions. The jury did not agree and rejected its claim.

The Justice Department says that taxpayers entered into hundreds of these types of tax shelters in the late 1990s and that billions of dollars may be at stake in disputes over these transactions.

Altria Group, Inc. (Altria) said today it will seek further review of a federal court jury verdict against it in a dispute with the IRS involving tax deductions related to four leveraged lease transactions. Altria filed suit seeking tax refunds totaling almost $25 million for taxes paid for years 1996 and 1997.

"We believe that Altria and its subsidiary, Philip Morris Capital Corporation, fully complied with the law governing these leveraged lease transactions and that Altria is entitled to a full refund," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Altria. "We will seek further review of the jury's verdict in the trial court and, if necessary, in the appellate court," added Garnick.

The leveraged lease transactions involved a Metropolitan Transportation Authority maintenance railroad yard in Hollis, N.Y.; a wastewater treatment facility in the Netherlands; and power plants operated by Oglethorpe Power Corp. in Georgia and Seminole Electric Cooperative in Florida.

The IRS challenged deductions relating to four leases in 1996 and 1997, and Altria paid the disputed amounts and filed suit against the IRS for a refund.

The case is Altria Group v. United States, Case No. 1:06-CV-09430-RJH-FM.

Altria directly or indirectly owns 100% of each of Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton Co., Ste. Michelle Wine Estates and Philip Morris Capital Corporation. In addition, Altria holds a continuing economic and voting interest in SABMiller plc.

References: Federal jury rejects Altria's tax shelter claim wtop.com, 7/10/2009; Altria Will Seek Further Review of Jury Verdict in Tax Refund Case, Altria Group, Inc., 7/8/2009.

0 comments: