General Electric Co. sued the U.S. Internal Revenue Service seeking a $658 million federal tax refund for overpaid taxes and interest tied to losses it claimed from the sale of ERC Life Reinsurance.
The dispute dates to Scottish Re Group Limited’s Scottish Holdings Inc. acquisition of ERC Life in 2003 from GE, the Fairfield, Conn.-based GE said in the suit. The IRS wrongfully disallowed a capital loss of $2.2 billion GE Consolidated Group realized from the sale of 95 percent of its ERC Life stock, according to the complaint.
GE was entitled to carry the entire loss back to 2000 and should have received a refund for the 2000 tax year of assessed taxes and interest totaling $658 million plus interest, the company said in a suit filed Feb. 14 in U.S. District Court in New Haven, Conn. GE is seeking $439 million in overpaid taxes and $219 million in interest.
The IRS “erroneously and illegally denied GE’s claim for a refund,” according to the complaint. “The grounds upon which the IRS denied the claim are erroneous, unsupported by the facts, and contrary to applicable law.”
Peggy Riley, a spokeswoman for the IRS, and Thomas Gick, a spokesman for GE, didn’t immediately return voice-mail messages left at their offices seeking comment about the lawsuit.
The case is GE v. IRS, 14-cv-00190, U.S. District Court, District of Connecticut.