The Orlando Business Journal reports that the IRS is auditing the Tribune’s Employee Stock Ownership Plan (ESOP):
The Internal Revenue Service is auditing the Employee Stock Ownership Plan that was a key component of Sam Zell’s Tribune Co according to media reports.
According to the reports, an IRS agent in Wisconsin is looking at the ESOP’s $250 million purchase of new shares issued by Tribune. The question regarding the purchase is whether or not the purchase would be considered to the benefit of Tribune employees.
Should the purchase be considered to be of benefit, it would be classified as tax exempt. If not, Tribune would potentially have to pay corporate income taxes and excise taxes, the reports say.
The IRS agent filed a statement regarding the investigation with the U.S. Bankruptcy Court, the reports say. Tribune is currently under Chapter 11 bankruptcy protection.
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