IRS audit of
Bishop has 45 daysBy Rick Daysog
to respond to the tax
The Internal Revenue Service's four-year investigation of the Bishop Estate and its trustees may be complete.
The IRS, which is conducting an exhaustive audit of the multibillion-dollar charitable trust for fiscal years 1992 through 1996, recently sent some of its initial findings to the estate, sources said.
Details of the IRS's initial reports were not available. But the findings are expected to be the first of several the agency plans to issue as part of its investigation of the estate.
An estate spokesman could not be reached for immediate comment, and the IRS has declined to confirm or deny its audit of the Bishop Estate.
Under federal regulations, the estate has 45 days to respond to the IRS's initial findings, also known as notices of proposed adjustments. The estate can negotiate with the IRS over its recommendations or can formally contest the agency's initial findings through administrative appeals.
The completion of the IRS audit was indicated in court filings late yesterday by estate trustees Oswald Stender and Gerard Jervis, who said they have voluntarily recused themselves from addressing the IRS audit.
Jervis and Stender are asking state Probate Judge Kevin Chang to order the majority trustees Richard "Dickie" Wong, Henry Peters and Lokelani Lindsey to recuse themselves from responding to the audit, saying all five trustees could face a conflict of interest.
Jervis and Stender have asked Chang for an expedited hearing.
The Star-Bulletin previously reported that the IRS audit is examining the trust's tax-exempt status and the relationship between the estate and its for-profit subsidiaries. The audit also is reviewing the trustees' $800,000-a-year commissions, free country club memberships, outside directors' fees and personal credit card transactions.
If the IRS finds that trustees benefited at the expense of the trust, it could issue hefty surcharges to board members. It is not known whether the estate's tax-exempt status will be affected.
Bishop Estate Archive