IRS Gives Travolta a Bad Review

“A Civil Action” may be an apt name for the tussle John Travolta has been involved in with the Internal Revenue Service.

The actor has been embroiled in a dispute that is slowly winding its way through U.S. Tax Court, in which the star is fighting an IRS demand that he pay $1.1 million in back taxes and penalties for the years 1993 through 1995.

It may be a lot of money for most of us, but it’s not about to break someone who now makes $20 million or so a picture. Nonetheless, in court papers, Travolta’s lawyers argue that the IRS unfairly wants to disallow losses and deductions Travolta claimed.

Details are sketchy in the court papers, but they show the dispute stems mostly from $2.27 million in losses Travolta claimed from a company called ATLO Inc. In addition, the IRS disallowed more than $50,000 in itemized deductions in 1994 and 1995.

Many top Hollywood stars, directors and producers operate through corporations for tax reasons. ATLO is a so-called S corporation, a device wealthy people often use for tax advantages. Earnings and losses flow through to the owners.

The court documents don’t specify the nature of the losses and deductions at issue, but they do say Travolta claimed losses of $576,014 in 1993, $921,502 in 1994 and $775,466 in 1995 related to ATLO.

The agency said Travolta’s taxable income should have been $2.2 million for both 1993 and 1994 and $4.7 million for 1995.

The dispute dates back to some leaner years in Travolta’s career, which was reignited in late 1994 with “Pulp Fiction” and has climbed back to where he is again one of Hollywood’s top-paid stars. His recent films include “A Civil Action” and “The General’s Daughter.”

Tax disputes are usually settled before they become public, unless the taxpayer decides to appeal, as Travolta did.

Neither IRS officials nor Travolta’s tax lawyers would comment.

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Lew Moving On? Is legendary mogul Lew Wasserman about to move from the Universal Studios lot he has called home for some 40 years?

Sources say the 86-year-old Wasserman in recent weeks has been considering buying a building on the Westside to house his charitable foundation, run by his grandson Casey, where he would also have offices.

Such a move would be both historic and symbolic. MCA Inc., which Wasserman headed, acquired the lot in December 1958, later buying the studio itself. Now called Universal Studios Inc., MCA was later sold to Japan’s Matsushita Electric Industrial Co., which in turn sold the company in 1995 to beverage giant Seagram Co.

Wasserman was made chairman emeritus by Seagram, and Universal’s headquarters building was named after him. But it’s well known that relations between Wasserman and Seagram have been cool since the acquisition, and people close to him say he’s increasingly uncomfortable being housed on the lot.

Wasserman didn’t return calls.

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Shootout at the Hollywood Corral: As the studio’s chief during Sony Pictures’ tumultuous period in the early 1990s, movie producer Peter Guber knows what it’s like to be caught in the cross-fire of a shootout.

Now he’s circulating a proposal for a how-to book on making movies, called “Shoot-Out,” to be written with Variety Editor in Chief Peter Bart.

An excerpt from the proposal being shown to book publishers: “Somewhere in the recesses of our unconscious lies the memory of the myriad stories spun by our ancestral shamans through whose litany mankind’s history was preserved. In only the last nanosecond of that time template, specifically 75 years, there emerged a technology and an entrepreneurial energy that afforded our modern-day shamans--filmmakers--their global reach and near-mystical clout in retelling their tales.”

Billed as “A Survival Guide to the Filmmaking Process,” the book, according to the proposal, aims “to reveal all of the connections in the food chain from the ‘eureka’ of the original idea until the denouement of its appearance on late-night television, drawing on a vision of the future as well as the repeated, often unheeded lessons of the past.”

One proposed chapter is called “Zoo Keepers.” It is described as being about “agents, managers and legal eagles who manage the gaggle of talent coveted by the studios, each of whom has his own agenda.”

Guber said no deal has been signed, but he added that the book proposal has generated “more than a lot of interest.”