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Bureaucrat vs. Bureaucrat

January 09, 2010

One federal agency encourages local agencies to participate in flaky tax shelters, to the chagrin of the federal tax agency:

The SILO transactions here are offensive to the Court on many levels. A cadre of company executives, in concert with teams of well known legal and accounting firms and other consultants, regularly constructed and participated in these tax schemes for Wells Fargo, apparently blind to professional standards of care. Representatives from the Federal Transit Administration (“FTA”) encouraged transit agencies to participate in SILO transactions as a way to raise additional funds, without seriously considering the probable adverse tax treatment of the transactions.

It works out badly for Wells-Fargo; the Claims Court ruled against 26 of their SILO tax shelters. Via the TaxProf.

Cite: Wells Fargo & Co., Fed. Cl. No. 06-628T.