WASHINGTON (Reuters) - General Electric Co is suing the Internal Revenue Service for a $658 million tax refund related to a tax loss the company claimed as it exited the reinsurance market more than a decade ago.
In a civil complaint filed on Friday in U.S. District Court for Connecticut, GE said the IRS wrongly disallowed a $2.2 billion loss it claimed from the 2003 sale of a reinsurance subsidiary.
The complaint said GE, a large conglomerate that sells jet engines and financial products, is owed a $439.3 million federal income tax refund plus $219 million in interest. A court date has yet to be set.
“The dispute involves a good-faith difference of opinion over the tax consequences of a restructuring done more than a decade ago,” GE spokesman Seth Martin said in a statement. “While we have paid the taxes in question, we believe it is in all parties’ interests to resolve this through a court decision,” he said.
GE is arguing that due to the 2003 sale of a struggling reinsurance business, ERC Life Reinsurance Corp, it could carry back tax losses into years it had taxable gains, according to GE’s court filing.
The IRS had disagreed with GE’s claims for losses and reversed a tentative tax refund to the company in 2004, the court filing said.
The IRS declined to comment.
GE told shareholders last year about the dispute with the IRS, according to the company’s regulatory filings.
GE, based in Fairfield, Connecticut, has faced public scrutiny from watchdog groups for its low effective tax rate. Chief Executive Jeff Immelt, a top adviser to President Barack Obama on jobs and the economy, has said repeatedly the United States ought to reform its corporate tax code.
The case is General Electric Company & Subsidiaries v. United States of America; No. 3:14-cv-00190.
Reporting by Patrick Temple-West; Editing by Howard Goller and Amanda Kwan