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.
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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.
Wells Fargo says it's reviewing the ruling and determining its next steps.