U.S. says AIG settles tax shelter lawsuit, will forgo foreign tax credits

In this news, we discuss the U.S. says AIG settles tax shelter lawsuit, will forgo foreign tax credits.

NEW YORK (Reuters) – American International Group Inc has agreed to settle lawsuit in favor of tax shelter related to entering fictitious transactions intended to generate bogus foreign tax credits, acting U.S. attorney Audrey Strauss said in Manhattan on Friday.

AIG accepted the denial of more than $ 400 million in foreign tax credits and the imposition of a 10% tax penalty, Strauss said.

The government said AIG filed a tax refund lawsuit in 2009, seeking to recover unauthorized foreign tax credits and other taxes for the 1997 tax year.

But the government said it had obtained “overwhelming evidence” that the underlying transactions lacked significant economic substance, had no legitimate business purpose, and were designed solely to produce tax benefits to which AIG was not entitled.

Report by Jonathan Stempel in New York

Original © Thomson Reuters

Originally posted 2020-10-23 20:26:10.

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