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Alliance Bancorp trustee, U.S. government settle tax refund dispute
By Caroline Salls
Pittsburgh, May 11 – Alliance Bancorp and Alliance Mortgage Investments, Inc. Chapter 7 trustee Tracy L. Klestadt requested court approval of a settlement reached with the U.S. government in connection with a tax refund dispute, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
The trustee said Alliance Mortgage acquired 100% of the bank’s outstanding capital stock.
The Alliance entities filed a consolidated tax return for the period from June 10, 2005 through Dec. 30, 2005 and paid $2.81 million in federal income tax.
Upon the entities’ joining ARH Mortgage, Inc.’s tax consolidation group when it purchased Alliance Mortgage, Klestadt said ARH filed a consolidated return for calendar year 2006 for all of the members of the tax consolidation group.
In November 2006, the United States filed a $1.12 million priority unsecured underpayment claim against Alliance Mortgage, as well as a $31,733 general unsecured claim.
Klestadt filed a complaint against the United States in June 2012, seeking a ruling that the Alliance estate was entitled to a $2.81 million overpayment tax refund.
Under the proposed settlement a $1.29 million overpayment of tax, plus statutory interest beginning on July 1, 2016, will be allowed for the Alliance Mortgage consolidated group’s U.S. corporate income tax period beginning June 10, 2005, and ended Dec. 30, 2015.
In addition, the Alliance estates will not be liable for any underpayment of the ARH Mortgage consolidated group’s U.S. corporate income tax, penalties or interest for calendar year 2006.
The trustee’s lawsuit against the government will also be dismissed under the settlement.
A hearing is scheduled for June 13.
Alliance Bancorp, a Brisbane, Calif., mortgage lender, filed for bankruptcy on July 13, 2007. Its Chapter 7 case number is 07-10942.
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