Sovereign Bancorp Seeks To Recoup $234M In Taxes From IRS

Law360, New York (November 26, 2013, 4:44 PM EST) -- In light of a Massachusetts federal judge's ruling that an international securities deal between banks contained economic substance, Sovereign Bancorp should be able to recoup $234 million in taxes assessed because the Internal Revenue Service labeled the scheme as a tax shelter, the bank argued on Monday.

The lawsuit arose out of Barclays PLC's recruitment of several American banks, including Sovereign, into a structured trust advantaged repackaged securities (STARS) transaction. As a result of the deal, Barclays received extra tax benefits in the U.K., while at...
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