A week after being slapped with a $246 million bill for back taxes, United Parcel Service yesterday said it was taking an additional charge against its second quarter earnings resulting in a $854 million loss for the period which ended June 30.
The action "will not have any foreseeable impact on our rates," according to spokesman Ken Sternad. "It should not be a concern of our customers at all."
Monday the Atlanta-based shipper told the Securities and Exchange Commission that it had enough cash on hand, more than $3 billion, to pay the Internal Revenue Service a potential tax liability of $1.67 billion. That would cover both the U.S. Tax Court judgement of $246 million for the 1983 and 1984 tax years, as well as taxes and interest for the tax years from 1985 to the present.
While an appeal to the U.S. Supreme Court seems likely, UPS said it is developing "a new arrangement for providing excess value package insurance for its customers" through an unnamed subsidiary amid plans to offer 10 percent of its common stock to the public later this year.
