Tentative IRS Settlement of OPL

[robonono]

Received an email today stating that there is a tentative settlement with the IRS on the UPS/OPL case.

Without disclosing any non-public information, I'll pass along these excerpts:

"UPS has a tentative basis for resolving all of the open years for all of the issues which pertains to UPS, OPL and their shareholders."

It is tentative because "there are a lot of items that need to be finalized for a "decision document" and a "closing agreement" to be signed. And until those documents are signed there could be a reversal of the process."

Still a large number of unknowns:
a) Don't know how much money we will be I getting back.
b) Don't know how much we will show as income on the book.
c) Don't know if there will be a special dividend.

One question can be answered now - "OPL will definetely get no money (OPL never paid any money to the IRS), and therefore the shareholders of OPL will not receive any dividend from a refund by the IRS."

"As for how much money is UPS getting back, we will not know for a while because the IRS will not refund any money until all of the issues for a taxable year have been resolved. So, for example, for 1985 there will be no refund until the aircraft expense vs. capitalization issue is resolved, and so on for the other years. We believe that we shuld be able to finalize the "settlement decision" (needed for 1984-1990 the years in fron of the court) and the "closing agreement" (for 1991-1999) by the end of the year. We are also working at trying to resolve all of the other issues that we have open for
1985-1999. But we know it is going to take a lot longer to resolve some of those issues."

 

[moreluck]

robonono.....
"we will be I getting back." Freudian slip???

 

[rshoe4056]

Am courious as to authenticity? of the email you received. From IRS? From UPS? Just a rumor?
Any other details that can be shared?

 

[michael]

robo,

It was my understanding that UPS had the big chunk of $$$$$$ on deposit with the IRS. It was also my understanding that the case was sent to an arbitrator for a final resolution on whether or not there was any $$$$ due for any reason. If there is any $$$$ coming back it will be to UPS. That then, should be reflected in the bottom line and ultimately in the UPS stock price.

I am confused as to what your last paragraph means:

"As for how much money is UPS getting back, we will not know for a while because the IRS will not refund any money until all of the issues for a taxable year have been resolved. So, for example, for 1985 there will be no refund until the aircraft expense vs. capitalization issue is resolved, and so on for the other years. We believe that we should be able to finalize the "settlement decision" (needed for 1984-1990 the years in fron of the court) and the "closing agreement" (for 1991-1999) by the end of the year. We are also working at trying to resolve all of the other issues that we have open for
1985-1999. But we know it is going to take a lot longer to resolve some of those issues."

Can you shed some light on it?

Michael

 

[robonono]

Sorry everyone, I did not mean to create such a stir with my post. I just passed on excerpts from an email that I received from a fellow UPSer.

I do not know the original source, and can not, therefore, attest with certainty, to the veracity.

moreluck...yes, I suppose that that was a Freudian slip.

rshoe4056...sorry, but no further details.

michael...yes, we have over $1 billion in escrow with the IRS over this issue. The amount that we will get back (including interest?) has not been determined. As for the last paragraph, I passed on a quoted excerpt. I don't know any more than is stated there.

 

[robonono]

From latest Traffic World:

Settlement Coming Due

UPS, IRS agree on 'tentative basis' to resolve $2.353 billion Bermuda tax case

In a long-awaited agreement, United Parcel Service and the Internal Revenue Service have reached what the nation's largest transportation company calls a "tentative basis" for settlement of a $2.353 billion tax dispute dating back to 1984.