BB&T (BBT) will record a hefty tax charge as it waits for the courts to resolve a longstanding dispute with the Internal Revenue Service.
The Winston-Salem, N.C., bank said Tuesday that it would record a charge of $281 million in the first quarter, though it intends to keep fighting the IRS in court. The company said that its tax reserve for this case could balloon to as much as $609 million, depending on next month's decision by the U.S. Court of Federal Claims.
The company said it decided to take the charge after the U.S. Tax Courts
BB&T is in litigation with the IRS to recover $892 million that it paid the agency in 2010. BB&T made this payment after the court disallowed certain foreign tax credits and deductions it took from 2002 through 2007.
The company's trial in the U.S Court of Federal Claims is set to begin March 4. BB&T said it could add as much as $328 million to the charge or decrease its tax reserve by as much as $496 million, depending on how the court rules.
BNY Mellon's dispute related to foreign tax credits on transactions similar to the ones at issue in BB&T's case. BNY Mellon now faces a $900 million increase in its tax bill after the adverse ruling.
