By Adam Lashinsky
June 19, 2007

Soon-to-be-public private-equity firm Blackstone clearly hopes it can thwart Congress’s efforts to force it to pay corporate income taxes. Turns out Blackstone also wishes it could dodge the taxman on some property sales in San Francisco. An odd and fascinating article in Tuesday’s San Francisco Chronicle explains that Blackstone is disputing an $11.7-million payment regarding its sale of 10 buildings in the city. (Read the full text here.) Blackstone acquired the buildings when it bought Sam Zell’s Equity Office Properties and then quickly re-sold them to Morgan Stanley (MS). According to the Chron, Blackstone made two tax payments, but it is disputing the second one without explaining why.

Looks like Blackstone is dotting its Is and crossing its Ts before the IPO. Better to not be in arrears and face a penalty and give the SEC something to complain about.

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