Bank of America Can’t Net Pre-Merger Merrill Lynch Tax Payments

Bank of America Corp. can’t offset a tax bill by reclaiming taxes that Merrill Lynch overpaid the government before the two financial giants merged in 2013, the Fourth Circuit ruled Tuesday.

The US Court of Appeals for the Fourth Circuit affirmed a lower ruling that the bank can’t claim the tax obligations of the two be treated as one and the same, which would allow Bank of America to “net” both companies’ overpayments and underpayments from past tax years to avoid paying interest to the government under IRC Section 6402.

The circuit backed the IRS interpretation of IRC Section ...