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Shur-Lok Heirs Score Favorable Tax Ruling



By JERRY MOSKAL

The estate of an Orange County aerospace entrepreneur has settled an Internal Revenue Service dispute for a fraction of what the taxman was seeking.

The IRS and heirs of Frederick W. Rohe, founder of Irvine-based Shur-Lok Corp., agreed to settle the matter for $2.5 million in added taxes.

The agency originally sought $11 million in extra taxes and penalties from Rohe’s estate.

The settlement was part of a decision signed by a U.S. Tax Court judge in Washington, D.C., in November.

“We’re pleased,” said Paul Frederic Marx, a lawyer with Costa Mesa-based Rutan & Tucker LLP who represented the Rohe estate. “It comes as no surprise because we knew full well that the government’s appraisals were no good.”

The dispute centered on the value of Rohe’s holdings in Shur-Lok, a maker of screws, bolts and other fasteners, and its European arm, Shur-Lok International SA.

Back in 2003, the IRS nearly tripled the taxable value of Rohe’s estate to $25.8 million from the $9.5 million the family reported.

The estate then filed a petition in tax court arguing the IRS overvalued Rohe’s stakes in the two companies.

“We were essentially proven correct,” Marx said. “We were confident in our appraisals. The (IRS) appeals officer agreed with us and was critical of the government’s appraisals, and ignored them. He agreed our appraisal had greater credibility.”

Talks with the IRS Appeals Office were lengthy, Marx said.

“The appeals process went on for several months,” he said. “It’s a good example of how the appeals process works.”

The IRS declined to comment on the case.

“We don’t comment on decisions, court documents,” spokesman Anthony Burke said. “Whatever our statement in the court record is, that’s our public comment. Litigation, decisions, that kind of thing, the record speaks for itself.”

Rohe, who died in 1998, founded Shur-Lok 54 years ago in Los Angeles and later moved it to Irvine. He started Shur-Lok as a one-man shop and later expanded his business into a global operation, with plants in Irvine and Belgium. The European arm makes aircraft controls.

Shur-Lok International also has sales offices in England, France, Germany and Italy.

Robert W. Rohe, son of Frederick W. Rohe, is chairman and chief executive of Shur-Lok Group, holding company of the Irvine and European businesses.

Other companies Shur-Lok spawned include Shurtronics Corp., a maker of non-destructive testing equipment, and Rohe Scientific Corp., which makes ultrasonic diagnostic devices for the healthcare industry.

The IRS originally demanded that the estate pay $9.3 million in additional taxes plus $1.7 million in penalties. The two-page stipulated decision said the estate would not be required to pay any penalties.

Moskal is a Washington, D.C.-area freelance writer covering U.S. Tax Court.

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