Gold Banc Corp. in Leawood, Kan., will pay the Internal Revenue Service nearly $3.5 million of taxes on interest it received on multifamily revenue bonds purchased in 2001 and 2002.
Though the $4.1 billion-asset Gold said it disagrees with the IRS' conclusion that it owed back taxes, chief executive officer Malcolm "Mick" Aslin said in a press release late Monday that it decided to pay "to avoid the cost, uncertainty, and distraction that would come from a prolonged legal proceeding."
Gold said it believed the $14.2 million of bonds it purchased from the City of Lee's Summit, Mo., the Community Development Authority of Manitowoc, Wis., and the Oklahoma Housing Development Authority were tax-free investments.
The IRS, though, said Gold owes taxes on nearly $9.4 million of payments it has received on the bonds since 2002. Gold said it would make one cash payment to cover three settlements with the IRS and will record the payment as a one-time charge to its third-quarter earnings, which it plans to release Thursday.
The company also said in its news release that it has recovered more than $4.6 million as settlement in claims it made against its attorneys in the bond transaction and the trustees of the Oklahoma bond deal. It plans to record the settlement as third- and fourth-quarter income.
Gold's stock fell Tuesday on news of the settlement. It was trading at $14.93 in the late afternoon, down 0.8% from Monday's close.
