Wells Fargo (NYSE: WFC) Sues U.S. Over Income Taxes

Wells Fargo & Co. (NYSE: WFC) is suing the federal government, one of its largest shareholders, over its 2003 income taxes. The suit filed on Monday demanded the return of $162.3 million paid in income taxes that it was “erroneously and illegally assessed” by the Internal Revenue Service in 2003.

Wells Fargo argues that the IRS made a mistake when it disallowed a $73 million deduction for California franchise taxes. The bank stated that it also overpaid on taxes related to a series of leaseback transactions involving a number of metropolitan transit properties.

The lawsuit was filed in the U.S. District Court in Minneapolis and detailed a series of complicated transactions involving relatively unknown Wells Fargo business units, some created expressly for tax purposes, with names such as Sirius LLC, Rigil Finance, and Carnation Asset Management Inc.

Wells Fargo currently owes $25 billion in taxpayer money from he bailout that it received last fall. Some have argued that Wells Fargo is effectually asking for more money from the Federal Government in the form of federal tax refunds.