LAWSUITS NEWS & LEGAL INFORMATION
Illegal Tax Deductions
Charlotte, NC: (Apr-04-08) The state Department of Revenue brought a lawsuit against First Charter Corporation, alleging that it was owed money as compensation for the bank's use of a disputed tax structure. In its annual report, filed Feb. 29, First Charter indicated that it participates in two entities classified as captive REITs and it has historically received dividends which resulted in certain tax benefits. Its REIT position has certain facts that are similar to a recent Wal-Mart case.
First Charter's tax troubles are related to a dispute which involved Wal-Mart and an alleged tax shelter. That suit claimed that Wal-Mart Stores Inc., essentially paid rent to itself and deducted the amount from its taxes. The retailer had allegedly transferred ownership of its stores to two real estate investment trusts (REITs), which it owned. It then paid tax-deductible rent to the REITs. The suit alleged that the practice was illegal and stated that it was owed money as a result of the improper transfers.
As part of a settlement reached, sources stated that First Charter Corporation will pay more than $15 million to the state Department of Revenue to resolve allegations. As part of the ongoing investigations, the Department of Revenue had been examining First Charter's corporate income and franchise tax liabilities for 1999 through 2006. [THE CHARLOTTE OBSERVER: FIRST CHARTER TO PAY BACK N.C.]
Published on Apr-8-08
First Charter's tax troubles are related to a dispute which involved Wal-Mart and an alleged tax shelter. That suit claimed that Wal-Mart Stores Inc., essentially paid rent to itself and deducted the amount from its taxes. The retailer had allegedly transferred ownership of its stores to two real estate investment trusts (REITs), which it owned. It then paid tax-deductible rent to the REITs. The suit alleged that the practice was illegal and stated that it was owed money as a result of the improper transfers.
As part of a settlement reached, sources stated that First Charter Corporation will pay more than $15 million to the state Department of Revenue to resolve allegations. As part of the ongoing investigations, the Department of Revenue had been examining First Charter's corporate income and franchise tax liabilities for 1999 through 2006. [
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