Berkshire Hathaway Sues IRS Over Bill
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Berkshire Hathaway Inc., the investment company headed by billionaire Warren Buffett, said in a suit that it mistakenly has been ordered to pay the Internal Revenue Service $16.3 million in taxes and interest.
The lawsuit, filed last week in U.S. District Court in Omaha, said the IRS improperly classified $750 million the company borrowed in the late 1980s. The loans were intended to help the company keep money on hand for investments or acquisitions and weren’t earmarked for dividend-paying securities as the IRS has ruled, the suit says.
The IRS linked the borrowed money to purchases of dividend-paying shares in several firms, including Coca-Cola Co. and Wells Fargo & Co., the suit said. As such, the IRS denied tax deductions for interest owed on the debt, the suit said.
Berkshire shares rose $1,205 to $74,005 on the NYSE.
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