Ramco-Gershenson Properties Trust, a REIT with retail holdings in 13 states, is the subject of two Internal Revenue Service inquiries that presents a potential tax liability for the company, and more worrisome, threaten its status as a REIT.

The tax bill, should Ramco lose its planned appeal, would be $22 million. More problematic is the IRS's challenge to Ramco's UPREIT structure, which is no different than many other REITs. If Ramco were to lose its REIT status, it would raise questions for other companies, according to KeyBanc Capital Markets REIT analyst Richard Moore II. If that happened, the company would be liable for taxes for those years at normal corporate rates.

But that's a worst-case scenario. Other analysts don't believe the inquiry will go that far. Deutsche Bank analyst Louis Taylor wrote in a report that he thinks the IRS is using the threat to create more bargaining leverage with the REIT so it can recoup the tax bill.

The IRS is seeking to disallow some deductions and losses Ramco took in its 1996 tax year prior to going public through a reverse merger that also resulted in the formation of Atlantic Realty Trust. The IRS wants to disqualify the company as a REIT for the period from 1996 to 2004. Ramco said if it needed to, it would pursue collection amounts related to the 1996 tax year from Atlantic Realty.

"We vigorously contest the matters raised by the IRS in their examination reports, and we intend to file a protest with the IRS Appeals Office," president and CEO Dennis Gershenson said in a statement. Gershenson could not be reached for further comment.

This is not the first time Ramco has run into tax problems. It settled audits related to tax years 1991 to 1996. Atlantic paid all tax amounts from the first settlement. The settlement in the current dispute would likely be less than $5 million.

For its part, Atlantic Realty said in an SEC filing that it thinks the IRS' position is incorrect and that it does not think it has "any obligation to make any payment to or indemnify Ramco in any manner for any tax, interest or penalty."

In trading Wednesday afternoon, the company's stock was at $27.24, down 41 cents from where it was trading Friday before the IRS announced its inquiry.

-- David Bodamer and David Koch