Merrill Lynch Wealth Management has long been one of the most respected names in the wealth management world. Its high-profile status has only been solidified with the recent promotions of two insiders and the roll-out of a new video application for its financial advisors. This comes after a highly publicized scandal involving one of its money managers and emails falsely claiming he hired hookers.
Bank of America Corp. recently acquired Merrill Lynch and is now facing a legal challenge from the IRS. The IRS claims that Bank of America cannot reduce the interest owed by offsetting its tax underpayments with overpayments made by Merrill Lynch. This is due to the fact that the two entities were separate taxpayers before the merger, making Bank of America ineligible to make such an arrangement.
This case is currently under review in the U.S. tax Court and a decision is expected shortly. If the court finds in favor of the IRS, Bank of America could be on the hook for millions in interest payments. However, the company has argued that the merger should be taken into account and that Bank of America should be allowed to make use of Merrill Lynch’s overpayments.