Pensions & Investments (11 Jan 10)
The Internal Revenue Service wants to tax the State of Wisconsin Investment Board some $40 million, including interest, to recover income taxes owed by a company in which SWIB had invested.
That tax would more than wipe out the entire proceeds SWIB received from its 25% stake in Shockley Communications Corp.
Despite the tax-exempt status of the Madison-based board, which oversees $70 billion, the IRS is seeking the entire $28.3 million SWIB received in its 2001 sale of SCC stock. SWIB had invested $7.3 million, producing a gain of 290%. Shockley reportedly agreed to sell its entire assets to Northern Communications Acquisition Corp. in early 2001.
The IRS also is seeking interest on that amount for a total claim of some $40 million.
Because SCC no longer exists, the IRS is looking to former Shockley shareholders, including SWIB, to recover taxes of $41.6 million plus $43.8 million in penalties and interest.
