Court Says Wells Fargo Used SILO Shelter; $115 Million Refund Denied

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The U.S. Court of Federal Claims rejects Wells Fargo & Co.'s claim it is entitled to a refund of more than $115 million in taxes it paid after IRS disallowed deductions stemming from the company's participation in 26 sale-in, lease-out tax shelters. “The SILO transactions here are offensive to the Court on many levels,” Judge Wheeler writes in his opinion in Wells Fargo & Co. v. United States. Wells Fargo claimed $115 million in depreciation, interest, and transaction cost deductions for the 2002 tax year. The deductions stemmed from the bank's participation in 26 leveraged lease transactions. Seventeen of the transactions involved domestic transit agencies and nine involved qualified technological equipment.