The U.S. Court of Federal Claims disallowed BB&T Corp.'s $659 million in deductions and credits generated by its participation in a complex tax avoidance transaction with Barclays Bank PLC, because the primary components of the transaction lacked economic substance (Salem Fin., Inc. v. United States).
Judge Thomas C. Wheeler found that the structured trust advantaged repackaged securities (STARS) transaction in effect from August 2002 through April 2007 had no purpose other than to generate tax savings and that penalties should be assessed against BB&T.
The transaction involved a trust established by BB&T with $6 billion in revenue-producing bank ...
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