U.S. Plans to Deny Corporate Taxes to Panama : New Sanction Would Block Payments Due Today From American Firms

The Reagan Administration has decided to impose a new economic sanction against the regime of Panamanian strongman Manuel A. Noriega that would deny him access to millions of dollars in Panamanian tax payments from American companies, U.S. officials said Wednesday.

According to the officials, the Internal Revenue Service will issue a new regulation this week instructing American companies that they will receive credit on their U.S. tax returns for taxes paid to Panama only if they pay them to deposed Panamanian President Eric A. Delvalle.

Officials said the new IRS order on foreign tax credits would apply to large U.S. corporations such as United Brands, Standard Oil of Ohio and Texaco, which pay many millions of dollars in Panamanian taxes each year.

“The effect should be quite significant,” one State Department official said. “There are big American interests paying taxes to Panama.”

Under Panamanian law, income taxes are due today. Some U.S. companies have operated in Panama on a cash basis since Panamanian banks closed earlier this month. Any cash payments they should make to the Noriega regime for their taxes would help it come up with the $11 million it urgently needs to meet payrolls this week.

Last Friday, Delvalle, who is in hiding, issued a decree extending the tax deadline until April 30 and telling U.S. companies to file their tax returns with Panama’s embassy in Washington. The embassy is controlled by Delvalle’s supporters.

‘Looking for Clarity’

“At the moment, we haven’t paid anybody,” said Tim Reynolds, a spokesman for Standard Oil of Ohio. “We’ve been looking for some clarity as to who we owe.” He said he could not estimate how much his company would be required to pay in Panamanian taxes this year. Officials at United Brands, based in Cincinnati and New York, refused to answer questions about the company’s operations in Panama.

The disclosure of a new economic measure against Noriega followed a National Security Council meeting Tuesday, in which the Reagan Administration tried to decide what new measures to take against Noriega. After Noriega’s troops raided and detained opposition leaders Monday, White House spokesman Marlin Fitzwater declared that there were “limits to our patience” with the regime.

A Reagan Administration official said Wednesday, however, that the Treasury Department and IRS have been preparing the new tax rules for a week or more. He said the rules are in line with the general policy of economic sanctions against Noriega approved earlier this month.

The Reagan Adminstration already had restricted the flow of U.S. dollars into Panama by certifying that the United States does not recognize the Noriega regime as Panama’s valid government. Once the State Department took that action, U.S. banks with deposits credited to the Panamanian government held onto the money, effectively blocking the Noriega regime from any access to it.

However, the Panamanian government has apparently been receiving some cash payments from U.S. companies for sales taxes and user fees on their operations in Panama. These taxes are not eligible for tax credits on the companies’ U.S. income tax returns, and the federal government therefore has no control over them.

An Eastern Air Lines spokesman in Miami confirmed that the air carrier paid between $172,000 and $179,000 in cash late this month for airport operations, landing fees and other services in Panama in February.

“The reason we paid in cash is that we had no other way to pay, in light of the fact that the banking system was not operating,” said spokeswoman Virginia Sanchez.

A spokesman for Texaco said that the oil firm has also converted to cash operations in Panama. “We are collecting at the pumps in cash, and we are making payments to a central bank in Panama in cash and receiving receipts for that cash,” Texaco spokesman K. Peter Maneri said. “And then the Panamanian government--well, we don’t know what the Panamanian government is doing with that.”

Maneri said that Texaco pays the Panamanian government about $9 million a month in sales taxes. Victor Fabrega, a spokesman for Texaco’s Refineria Panama, said that when its most recent sales taxes were due, “The (Noriega) government requested cash.”

“Noriega’s still been able to squeeze some money out of the (Panamanian) economy to meet his payrolls,” one Reagan Administration official said Wednesday. He said the Administration hopes that the “cumulative effect” of all the U.S. economic sanctions will gradually succeed in weakening Noriega to the point where he decides to give up power.

A spokesman for the IRS declined to comment on the new rules for Panama, explaining that the rules have not been officially released. The IRS spokesman also could not say whether such an action has ever been taken for tax payments in any other country.

Acting on behalf of Delvalle, the Panamanian embassy in Washington this week issued a statement that said that tax payments made to any bank accounts controlled by the Noriega regime “will not fulfill a payer’s legal tax obligations to the Republic of Panama.”

Some U.S. officials acknowledged that there could be legal problems with enforcement of the new ruling. They said that some U.S. tax court rulings have held that, if a company pays taxes to a foreign government under duress, it is entitled to receive credit on its U.S. taxes.

Kenneth Krupsky, a tax partner at the Washington law firm of Arnold & Porter, which represents Delvalle, predicted that the IRS action will create new friction between the Noriega regime and American businesses. “I assume that Noriega is going to say March 31 is the (tax) deadline, and that you should pay (the taxes) to me,” Krupsky said.

Times staff writers Jim Schachter in Los Angeles; Art Pine in Washington and Dan Williams in Panama City contributed to this story.