Posted Apr 15, 2011 07:41 pm CDT
Wells Fargo & Co wrongly claimed $115 million in tax deductions for the 2002 tax year, the U.S. Court of Appeals for the Federal Circuit ruled Friday.
The opinion (PDF) addresses Wells Fargo’s attempted use of “sale-in, lease out” transactions, the Wall Street Journal (sub. req.) reports. Those transactions involve tax-exempt entities selling assets to a taxpayer and leasing the items back. Known as “SILO deals,” the situation involved Wells Fargo buying railcars and other equipment from public agencies, leasing them back, and claiming millions in depreciation tax benefits.
The SILO transactions, the court ruled, were “purely circular transactions” that were “abusive tax shelters.”