The Internal Revenue Service is asking the Cincinnati Bengals to pay taxes on the $26 million raised from the sale of personal seat licenses to help pay for construction of Paul Brown Stadium.

        Team officials say they owe nothing because Hamilton County handled the sale of the licenses, which are one-time fees that give fans the right to buy season tickets.

        The team says it doesn't know how much the IRS is seeking in a recent tax deficiency notice.

        In a statement released Thursday, team officials say they are offering to split the costs of defending the IRS action with the county, even though the stadium lease says Hamilton County has the obligation to “pay and defend all claims or assessments.”

        “We believe this issue is no different than Hamilton County selling dog licenses or parking spaces,” the Bengals' Chicago attorney, Thomas Borders, said on the team's Web site.

        “In both cases, Hamilton County transacts business with private individuals or business, accepts the revenue into County owned and controlled bank accounts, and spends the money on county government programs as it sees fit.”

        Mr. Borders said the county isn't eligible to pay federal taxes because a local government can't be taxed by the IRS.

        The county ran the license program from 1996 to 2000 and said the revenues raised through the sale of the seat licenses were the Bengals' contribution toward stadium construction. The stadium opened in August 2000.

        Bengals officials, unavailable for comment Thursday night, have called the $26 million raised through the program a contribution toward construction. The team's total contribution was $44 million.

        A June 2000 amendment to the Bengals lease transferred control of the program from the county to the team and also absolved it of any tax liabilities.

        The tax issue has been the subject of two closed-door sessions with Hamilton County commissioners.

        County Administrator Dave Krings said there will be another closed-door meeting on the matter with commissioners early next week.

        “I don't believe anyone owes the IRS anything,” Mr. Krings said. “It was revenue generated from the fans that went through the county directly into construction of the stadium.”

        Mr. Krings expects a public vote by commissioners after the meeting but declined to elaborate.

        Commissioner Todd Portune said he wants to know when the IRS investigation into the matter started and who at the county and with the team knew of the investigation at the time of the lease amendment.

        “The (license) program was a scheme concocted to meet the Bengals' promise of a capital contribution toward construction without them having to write a check,” Mr. Portune said. “There's no doubt in my mind that the Bengals received tremendous benefit from the program.”

        Commissioner Tom Neyer, who was on the commission in June 2000, said he wasn't aware of any pending IRS action or investigation when he signed the lease amendment.

        The team said that several NFL and baseball stadiums have been funded in similar fashion and could undergo the same IRS scrutiny.

        The IRS battled the Brown family's ownership of the Bengals in tax court five years ago when the agency ruled that the estate of their father, Paul, who founded the Bengals, owed $40 million in additional taxes.

        Paul Brown died Aug. 5, 1991. In April 1997, the court found in favor of the family, and the IRS chose not to appeal.

Bengals owe taxes, IRS says
Claims of retardation likely
Graham mission stresses inclusion - unlike 1977
New look planned for old city area
Prayer for success
New law reduces speeds on water
Charter school's future uncertain despite ruling
Folks 'goetta' new love at fest
Homers won't be cheap at new park
Hospitals faulted for offering fast food
Jump-ropers head to nationals
Kids get kick out of soccer
Luken appoints economic task force
Mariemont board to cut $1.5M
Obituary: Geneva Rubins, 84, devoted to nursing
Officer admits lying in Jorg trial
Sounds of jazz will resonate in region
Springtime ends today with first day of . . . smog
Teens find joy in volunteering
Title agency owners charged with fraud, conspiracy
Tristate A.M. Report
BRONSON: Sexual abuse
HOWARD: Some Good News
SMITH AMOS: One man's story
Butler Co. jail dedication, tours today
Lebanon may put income tax increase on ballot
New Miami council debates police chief
Sex offender unnerves Reily Twp.
Democrats elect new state party chairman
School board to appeal 10 Commandments order
Architect sues Ky. Speedway
Board of regents votes to dismiss KSU president
Both sides intend to continue Title X fight
Diocese reviewing new rules
Farm Aid concert considering Sparta track
School group orders funding study