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Ford Loses Bid to Collect Interest on Overpaid Taxes
Ford Motor Co. has lost an appeal claiming the U.S. government owes the company about $445 million in interest on excess tax payments dating back to 1983.
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Ford Motor Co. has lost an appeal claiming the U.S. government owes the company about $445 million in interest on excess tax payments dating back to 1983.
Ford paid some $875 million in additional taxes after the Internal Revenue Service estimated the company had underpaid taxes in the previous decade by about $2 billion.
The company initially responded with payments as cash bond deposits. It later converted them to advance tax payments, thus making them eligible to earn interest if the IRS later decided the payments were excessive which it eventually did.
Ford sued in 2008 that is was due interest on all extra payments made between 1983 and 1994.
The appeals court conceded that IRS enforcement of the tax code has been inconsistent on the question of interest due in such cases. But it ruled that Ford's payments initially were to prevent interest penalties from piling up rather than paying down the $2 billion in taxes IRS initially said the company owed.
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