Associated Press, April 7, 2003
Utility Co. May Be Liable for Enron Taxes
PORTLAND, Ore. - Portland General Electric may have to pay part of an $111 million tax bill facing parent company Enron as a result of Enron's bankruptcy, PGE officials say.
The Internal Revenue Service filed various tax claims in the Enron bankruptcy on March 28, according to documents PGE submitted Thursday with the Securities and Exchange Commission.
The Form 10-K filing with the SEC states that PGE, along with other members of Enron's consolidated tax group of companies that are not in bankruptcy, are liable for some penalties and interest associated with the taxes still due.
The IRS also could go after PGE for any portion of the claim that is allowed in the bankruptcy but can't be collected from debtors.
PGE officials were unavailable Saturday to comment on the filing or on the utility's potential tax liability.
The IRS filing indicated the agency likely would apply $63 million in refunds due Enron against the claims, potentially reducing the tax bill to $48 million.
Details of the IRS claims have not been made public, and PGE did not include a breakdown of amounts attributable to taxes, interest and penalties.
"Enron management has informed PGE that Enron is negotiating with the IRS in an attempt to resolve issues raised by the IRS claims," PGE said on its SEC form.
In PGE's annual report, filed with the SEC in mid-March, the utility's management said it believed PGE's exposure to potential tax liabilities "would not be material."
Enron reportedly paid little, if any, taxes in the last five years. It declared bankruptcy in December 2001, the largest company to fail in U.S. history, at the time. Enron purchased PGE in 1997.
An IRS audit, which served as the basis for the tax claims, likely would explain Enron's tax situation in more detail if it is made public.