Only one Wal-Mart real estate agent, Tony Fuller, represented the company both as a tenant and as a landlord in his lease agreement with himself. Ernst & Young LLP, the audit firm that sold the strategy to Wal-Mart, is also the company`s external accountant. In its internal sales training documents, the audit firm explicitly called the strategy a tax-cutting method – a red flag for tax authorities, who often require tax havens to have other business objectives. Wal-Mart began transferring ownership of real estate – the country and buildings – to REIT for hundreds of its business in 27 states, as shown by real estate records. Then Wal-Mart Stores East signed a 10-year lease with its ERT, which was signed on January 31, 1, 1997 went into effect and committed to pay a fixed percentage of the “gross revenue” of the transactions as rent, according to a copy of the agreement filed in the North Carolina case. Mr. Fuller, Wal-Mart`s real estate agent, is cited as an interlocutor for both the tenant and the owner. The original lease was due to be renewed this week. It`s unclear how much Wal-Mart has paid to its own REITs over the past five years.
Annual rents – on which tax savings are based – are linked to the “gross turnover” of the stores, the lease says. A spokesman for Ernst & Young declined to comment on its work as REIT, saying it was “forbidden for the company to speak about customers` business.” The spokesman said he could not verify the authenticity of internal sales training materials from quotes from the Journal. He said, however, that “the limited language communicated in the internal memo does not reflect the quality and type of advice we offer our clients.” For any questions relating to signage or advertising, refer to the link under Advertising and Lease Line Guide Fleet`s lawyers have said in court documents that their REITs are legitimate, and the fact that they were partly motivated by tax considerations does not legally undermine their valid business purpose – to raise capital, Say. A KPMG spokeswoman declined to comment on the Fleet case, but said it had halted all participation in “pre-packaged tax products” ahead of a 2005 deal with the U.S. Department of Justice on inappropriate tax strategies that also led to the indictment of 17 former KPMG officials. To meet the 100-shareholder threshold required by REITs, Wal-Mart distributed a minimum amount of non-voting shares to about 114 Wal-Mart employees, according to a person familiar with the deal. The dividends distributed were nominal. The structure was Wal-Mart`s top management. Shareholders were generally executive and senior vice-presidents. David Glass, then president and CEO of Wal-Mart, was listed in the lease agreement as president of Wal-Mart Stores East and Paul Carter, then executive vice president of Wal-Mart, was named president of the REIT. Wal-Mart could deduct from its taxable income the rent that Wal-Mart Stores East paid to the REIT.
. . .
Teilen Sie den Post: