The U.S. has been increasingly going after foreign financial institutions that try to skimp on taxes. The latest move from the IRS is an aggressive lawsuit against Deutsche Bank, which the federal tax agency claims owes the U.S. somewhere in the neighborhood of $190 million in overdue taxes, penalties and interest.
However, if you ask Deutsche Bank, they settled this dispute five years ago. According to reports, the large German bank claims that it reached a settlement with the IRS back in 2009 and it is not sure why the U.S. is coming after again regarding the same taxes.
The issue revolves around a deal that began back in 200 when Deutsche Bank acquired a company that owned three million shares of Bristol-Myers Squibb. When those shares jumped in value, the U.S. claims that Deutsch Bank skipped out on tens of millions of dollars in taxes from capital gains, when the bank eventually sold the shares.
According to the lawsuit the U.S. claims that the bank set up several so-called “shell companies” in order to absorb the tax blow from the profits made when they sold the shares. The IRS claims, however, that those shell companies did not have enough money to pay the taxes the federal government was owed. The lead prosecutor in the case claims that Deutsche Bank was involved in “nothing more than a shell game.”