Bringing Home
Those numbers show that what the company effectively did through the transactions was bring home tax credits and income that had already been taxed while isolating lightly taxed income outside the U.S. Repeating that pattern this year would require finding more foreign tax credits within a pool of income that has a lower overall tax rate.
Bank of America’s Dubrowski wouldn’t say how much money the company repatriated or whether the company will undertake similar future transactions.
The largest U.S. companies, such as Bank of America, are under routine audit by the IRS, which analyzes tax-related transactions and their legality. Those audits can take years. The company and the IRS are still trying to resolve Bank of America’s taxes from as far back as 2001, according to the bank’s securities filings.
Bank of America hasn’t filed its tax return for 2012, Dubrowski said.
The company provided no detail in securities filings or an investor call on exactly how it generated the tax credits.
Bruce Thompson, the company’s chief financial officer, referred to the transactions as “restructurings” during a January call with investors.
Divesting Businesses
As part of a companywide reorganization, Bank of America has been divesting businesses outside its core mission and trying to bolster its capital cushion to satisfy regulators.
Brian Moynihan, the company’s 53-year-old chief executive officer, has presided over the sale of more than $60 billion in assets since taking over the company in 2010. Businesses that were sold or shuttered included the company’s Canadian and European credit-card units, Merrill Lynch wealth management units in Europe, Asia, the Middle East and Latin America, and stakes of Chinese, Brazilian and Mexican lenders.