U.S. TAX COURT: UPS OWES $67 MILLION PLUS PENALTIES

   United Parcel Service may have to pay more than $200 million in back
federal taxes due to a decision handed down by the U.S. Tax Court on
Tuesday.
   The Internal Revenue Service had ruled in 1995 that UPS under-reported income in 1983 and 1984 from Overseas Partners Ltd., a Bermuda-based subsidiary that UPS created to reinsure excess-value package insurance. UPS appealed.
   The Tax Court sustained the IRS ruling, saying that UPS is liable for
the $67 million in back taxes, plus interest and additional penalties due
to its "negligence or intentional disregard" of tax rules.
   UPS said that interest and penalties could push the total IRS bill to
more than $200 million. UPS believes there are grounds for an appeal and is considering options.
   The IRS has also sent UPS tax deficiency notices for the years
1985-1990, "based on the same theories as those considered in the Tax Court opinion," UPS said.
   UPS, which spun off Overseas Partners in 1984, says that its former
subsidiary operates independently.