Film: Hollywood sources are speculating that a...

Film: Hollywood sources are speculating that a tax dispute between Carolco Pictures and the Internal Revenue Service involving the use of offshore tax havens may be coming to a head. IRS officials are about to send out letters to several companies they have been unable to reach agreements with, asking them to respond to IRS points. One of the companies is said to be involved in major offshore tax issues. Hollywood lawyers and accountants said they believe the letter is headed in Carolco’s direction. A spokesman for the company declined to comment. Separately, Carolco, which recently walked away from a financial cliffhanger by revamping its corporate structure, narrowed its losses to $11.2 million in the quarter ended Sept. 30, from a $33.1-million loss a year earlier. However, the company said “Cliffhanger,” an action hit that has grossed about $200 million worldwide since its release by Tristar Pictures in May, did not contribute to its feature film revenue in the quarter. Carolco said the film, which stars Sylvester Stallone, was produced by a joint venture in which Carolco has ownership of less than 50%.