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FARMINGTON HILLS, MI-The IRS has issued two examination reports seeking to disallow certain deductions and losses Ramco-Gershenson Properties Trust claimed in its 1996 tax year and to disqualify the company as a REIT for the years 1996 through 2004.
"We vigorously contest the matters raised by the IRS in their examination reports, and we intend to file a protest with the IRS Appeals Office," said Dennis Gershenson, the REIT's president and CEO.
The contention stems from deductions and losses the REIT claimed in 1996 in relation to a transaction with Atlantic Realty Trust. "If the need arises, we intend to pursue collection of amounts related to the 1996 tax year from Atlantic Realty Trust under the Tax Agreement," Gershenson said.
In recent months, locally based Ramco-Gershenson has been in a flurry of legal and financial misfortunes. Earlier this month, it appointed Grant Thornton as its new independent auditor. In April, incumbent auditor Deloitte & Touche LLP declined to participate in a request for proposal process to retain the business. An April 11 Form 8K with the SEC report discloses that Deloitte had an adverse opinion regarding employee bonus reporting and whether it was in conformance with generally accepted accounting principles.
In March, Ramco-Gershenson said it would restate financial statements for 2002, 2003 and three quarters in 2004. The company said it would revise its accounting procedure for employee bonuses to accrue during the period in which they are earned. Previously, the bonuses were recorded when paid.
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