Reporting error forces Casey's to pay $31.5M to IRS

Ankeny-based Casey's General Stores Inc. said Monday it is revising its financial statements for the past three years because of an error in calculating ethanol excise tax. The convenience store chain said it repaid the federal government $31.5 million in taxes and interest because of the error.

The accounting oversight was discovered during a routine Internal Revenue Service audit at the end of October.

"We deeply regret the errors that led to this revision, and we are taking swift and decisive action to enhance our excise tax reporting process and systems to resolve the issue," said Robert Myers, the company's chief executive.

Casey's reported the error after the market closed on Monday. The stock had closed the day at $87.87, up 65 cents, but fell by more than a dollar in after-hours trading.

The event did not affect the company's quarterly dividend payments of 20 cents per share, or Casey's long-term growth plans, Myers said. Casey's plans to buy or build 72 to 108 stores and replace 25 this fiscal year.

The company's payment to the IRS was made from cash on hand, said Bill Walljasper, senior vice president and chief financial officer.

The company said it has revised financial statements for fiscal years 2012, 2013, 2014 and for the first quarter of 2015. Before January of 2012, Casey's had received a federal tax credit for blending ethanol and gasoline, which offset a tax they owed on ethanol. When the tax credits expired in 2011, the company said it inadvertently failed to record the proper federal excise taxes from January 2012 through July 31 of this year.

The unrecorded excise taxes and interest the company paid to the IRS affected Casey's diluted earnings per share by 4.5 cents in each of the affected quarters, the company said.

Casey's voluntarily reported the error to the IRS and paid the owed taxes. It also put new processes in place to ensure proper reporting of the excise taxes. "More eyes will be seeing it," Walljasper said.