press release

Chevron Offers To Give Tax Documents To The IRS to Clear The Air Of Any Suspicion

CHEVRON OFFERS TO GIVE TAX DOCUMENTS TO THE IRS TO CLEAR THE AIR OF ANY SUSPICION OF WRONGDOING

SAN FRANCISCO, Jan. 30, 1996 -- Chevron yesterday offered to give the IRS more than 100 documents involved in a current tax case to demonstrate that they contain no evidence of illegality.

"We're confident these documents will show no wrongdoing on our part," said Bruce Marsh, Chevron's General Tax Counsel. "We've offered to hand them over so the IRS can see for themselves."

The case involves an IRS inquiry into about $1.4 billion in taxes that Chevron paid to the Indonesian government from 1983 to 1987. Last Friday, a magistrate said the company should turn over the papers because they would show evidence of wrongdoing.

"The notion that these papers would support a suspicion of wrongdoing must be based on a total misunderstanding," said Marsh. "In reality, the documents contain no facts that the IRS isn't already aware of."

Marsh said the company had originally withheld the documents to protect the attorney-client privilege.

"While we fully believe we would have prevailed on this point, last Friday's ruling changed the issue," he said. "Now it's our integrity that's on the line. That's why we've offered to release the documents. We believe this will clear the air."

In making the offer, Chevron also asked the IRS to join in seeking a court extension of next Monday's deadline for Chevron to appeal the magistrate's report. The IRS has taken the offer under advisement.

The case centers on an IRS attempt to reinterpret a long-standing agreement worked out in the late 1970s among the U.S. State and Treasury departments, the Indonesian government and the oil industry. The agreement allows taxes paid to Indonesia and other foreign governments to be taken as a credit against U.S. taxes due on the foreign income.

An Oakland, Calif., magistrate, in assisting a federal judge, was asked by Chevron and the IRS to rule on whether certain documents were subject to the attorney-client privilege. The magistrate agreed with Chevron's legal position that the documents are privileged. However, he opined after reading the papers that there was reason to believe that "crimes and frauds" had been committed.

"We have not and would not engage in any illegal or unethical activity to evade taxes in the Unites States or any other jurisdiction," Marsh said.

Updated: January 1996