NEW YORK (AP) — A federal court has ruled that Wells Fargo is liable for a negligence penalty in a tax case that involved foreign tax credits, but the bank prevailed in another part of the case that could mute any payment.
The case involves Structured Trust Advantaged Repackaged Securities, or STARS.
Wells Fargo said the structure exempted it from tax, which the IRS disputed. A jury ruled last year that Wells Fargo’s STARS were two products, a loan and trust. The trust was ruled to be simply for tax purposes, while the loan was not.
A court found Wells liable for a 20 percent penalty Wednesday tied to tax credits, but also that it could deduct interest expenses from the loan.
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Wells Fargo says it’s reviewing the ruling and determining its next steps.