Fourth Circuit: Taxpayer not entitled to net interest on tax overpayments made by merged corporation under section 6621(d)

Consistent with earlier decision of Federal Circuit

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July 29, 2025

The U.S. Court of Appeals for the Fourth Circuit today held that the taxpayer, which merged with another corporation in 2013, was not entitled under section 6621(d) to net pre-merger tax overpayments made by the corporation it merged with against the taxpayer’s pre-merger tax underpayments for purposes of obtaining a refund of interest the taxpayer paid on its tax underpayments.

The court found that the “interest netting” rule of section 6621(d) only applies when the tax underpayments and tax overpayments are made “by the same taxpayer,” and the merger did not render the two corporations the “same taxpayer” for purposes of section 6621(d). Accord Wells Fargo & Co. v. United States, 827 F.3d 1026 (Fed. Cir. 2016).

The case is: Bank of America Corporation v. United States, No. 23-2319 (4th Cir. July 29, 2025). Read the Fourth Circuit’s decision

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