Businesses in Trouble with the IRS

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Sushiko and Altria are two businesses recently in trouble with the IRS for not paying their taxes. Altria Group, the makers of Marlboro based in Richmond, Virginia just announced they are going to pay $500 million in federal and state taxes to settle their dispute with the IRS. The dispute is over the taxes on lease transactions handled by its subsidiary Philip Morris Capital Corporation. In light of this, Altria will be revising its forecast earnings for the year to reflect this payment.

Altria already took a $627 million charge last year in anticipation of the settlement. However, the company expects to record a one-time benefit of 3 cents per share in its second quarter to adjust for the difference between the assumed and actual settlement amount. According to the company, this benefit will boost its 2012 fiscal year earnings to an estimated $2.28 to $2.34 per share, a rise from its prior expectations of $2.25 to $2.31 per share.
However, Altria’s full-year adjusted guidance which it set at a range of $2.17 to $2.23 per share was left unchanged. The company said it does not expect the IRS settlement to affect its dividend or share repurchase plans.
Analysts are expecting Altria to earn $2.20 per share on an adjusted basis, according to information obtained from FactSet.

In the meantime, the IRS has filed a tax lien for $840,000 against Sushiko, Washington’s oldest sushi restaurant, for failing to settle their back taxes according to documents by the Washington Recorder of Deeds. Daisuke Utagawa, the co-owner of Sushiko, confirmed that a lien was filed but declined to mention anything more. The lien was for $841,144 in unpaid back taxes.

IRS spokesperson, Christina D’Amico declined to comment on this ongoing case, but said in an e-mail that the IRS files liens only after the agency sends delinquent taxpayers a bill and they “neglect or refuse to fully pay the debt in time.” According to the IRS, the lien “attaches to all property and rights to property of the taxpayer.”
Utagawa confirmed that the issue with the IRS will not compel him to close the Washington outlet, which he opened in 1976 (a second outlet in Chevy Chase, Md was opened in 2008). The matter will also not affect Utagawa’s other project, namely the planned ramen/izakaya restaurant, Daikaya on Sixth Street NW in Chinatown which was to have opened earlier this year. The construction of Daikaya has run into construction permitting delays, but it is still on track.

In comparing Sushiko’s tax issue with Daikaya’s construction problem, Utagawa said,”One has nothing to do with the other.”

 

Published In: Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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Darrin Mish, Tampa Tax Attorney
The Law Offices of Darrin Mish, P.A.

Darrin T. Mish is a Nationally recognized Tax Attorney whose practice focuses on representing... View Profile »


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