Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
A state court dismissed a whistle-blower lawsuit against Citigroup Inc. alleging that the company improperly took state net operating loss deductions ( New York ex rel. Rasmusen v. Citigroup, Inc., N.Y. Sup. Ct., 100175/2013, 5/17/17 ).
In a May 17 ruling from the bench, state Supreme Court Judge Charles Ramos granted Citigroup’s motion to dismiss the case.
The case, along with one against Sprint Nextel Corp., is being watched closely by tax practitioners because it is among the first and highest-profile tax cases filed under the state False Claims Act.
The lawsuit was filed under the FCA by Eric Rasmusen, an Indiana University economics professor who argued that Citigroup improperly took some $800 million in state net operating loss deductions in connection with the sale of stock to the U.S. Treasury Department under the Troubled Asset Relief Program (TARP).
Attorneys for both sides declined to comment on the decision.
The U.S. District Court for the Southern District of New York remanded the case to a state trial court in December, ruling that it lacked jurisdiction because Citigroup failed to raise a federal issue.
To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
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