Tribune Reorganization Opposed by IRS Over Buyout

U.S. tax officials oppose Tribune Co.’s reorganization plan, arguing it would stop them from collecting potential taxes related to the bankrupt newspaper publisher’s 2007 buyout.

The U.S. Labor Department is investigating the tax implications of the $8.3 billion buyout, the Internal Revenue Service said in an objection filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Should that probe determine Tribune owes taxes related to the buyout, the IRS would be barred from collecting them because of the legal releases contained in the plan, U.S. government attorneys wrote.