Government seeks $2.1 million tax tab from Pyramid Breweries

The federal government has told Pyramid Breweries that it thinks the Seattle company owes $2.1 million in federal taxes and interest on beer that was brewed as part of a contract with Portland Brewing, according to a company filing with the Securities and Exchange Commission.

From January 2005 through May 2006, the Portland company paid $1 million in taxes on that beer instead, an amount that Pyramid says it can claim if the money is refunded. That would lower Pyramid's total obligation to $1.1 million.

Pyramid disagrees with the government's findings, which came after an audit by the Federal Alcohol and Tobacco Tax and Trade Bureau. The company is looking for ways to reduce or eliminate the amount of the "proposed assessment."

If the government's decision stands, Pyramid could pay as much as $660,000 more a year in federal taxes on the beer produced by Portland Brewing.

Nation and World

Telecommunications

Shareholders OK sale of BellSouth

BellSouth shareholders Friday overwhelmingly approved the proposed sale of their company to AT&T for $67 billion in stock. AT&T shareholders later voted to issue new stock in the combined company.

The deal would expand the reach of the nation's largest telecommunications provider and put the two companies' wireless joint venture, Cingular, under one roof.

Federal and state regulators also must approve the deal. The BellSouth and Cingular names would be phased out.

Financial

CEO agrees to SEC interview

John Mack, chief executive of Morgan Stanley, has agreed to be interviewed by the Securities and Exchange Commission (SEC) in an investigation of a hedge fund he participated in before taking over the Wall Street firm, the company said Friday.

The SEC has been looking into whether Pequot Capital Management acted on insider information in 2001 when trading shares potentially involved in an upcoming merger. A former SEC staff attorney testified before Congress last month that he believed Mack to be the tipster, which Mack has denied.

$30 billion in profit likely from 5 firms

Five of the world's largest energy companies are expected to report combined second-quarter profits next week of more than $30 billion, a bounty fueled by worldwide economic growth and political instability that helped keep oil above $70 a barrel.

The five oil behemoths releasing quarterly results next week — BP, ConocoPhillips, Chevron, Exxon Mobil and Royal Dutch Shell — earned an estimated $33.6 billion, or 32 percent more than a year earlier, according to analysts surveyed by Thomson Financial.

World oil prices that rose 33 percent, on average, helped drive the earnings growth.

Compiled from Seattle Times business staff and The Associated Press