Wells Fargo & Co. is not allowed to claim $115 million in tax refunds from 2002 related to a type of leasing transaction that the Internal Revenue Service considers an illegal tax shelter.
The U.S. Court of Federal Claims denied the deductions because the deals "lack economic substance and were intended only to reduce Wells Fargo's federal taxes," according to Judge Thomas Wheeler.
The deductions were based on "sale-in, lease-out," or SILO, deals that allow tax-exempt entities, such as public-transit agencies, to transfer tax benefits for a fee to a U.S. taxpayer. The benefits stem from depreciation on assets, such as rail cars, buses and telecom equipment, according to the ruling.
Wells Fargo said it was disappointed in the decision and is considering whether to appeal.
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