High Court won’t hear Ford appeal of tax overpayment
Washington — The U.S. Supreme Court without comment Monday refused to hear Ford Motor Co.’s appeal of a $445 million tax case, saying it is not entitled to a refund of tax overpayments dating back three decades.
In 2012, a federal appeals court upheld a district court ruling in Detroit that denied the automaker the interest for taxes it owed from 1983-89, 1992 and 1994. In 1991, 1992 and 1994, Ford made payments to the Internal Revenue Service totaling $875 million after the government said it had underpaid its taxes.
In 1994, Ford asked IRS to treat these as advance payments — rather than a cash bond — because then Ford could be entitled to interest if a court or the IRS found later it had overpayed its taxes. The IRS did later determine Ford had overpaid its taxes and agreed to pay Ford interest, but only from the date it had asked that the funds be treated as advanced payments. The IRS says taxpayers can either treat taxes as a bond or advanced tax payments — so if the taxpayer did underpay taxes, it doesn’t owe interest on the back taxes.
Ford sued in 2008 and U.S. District Judge Patrick Duggan in Detroit found in 2010 that while Ford’s argument “may have some merit,” it said the IRS argument was reasonable. The issue is that federal tax law doesn’t define the date of overpayment.
In December 2013, the High Court kept the case alive when it sent the long-running tax dispute back to an appeals court for further hearings on whether the automaker was entitled to $445 million in interest on taxes it overpaid.
Ford said in a statement, “We are disappointed that the Supreme Court declined to hear our appeal which presented an important issue regarding when taxpayers are entitled to recover interest on taxes overpaid to the government.”
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