In an opinion, here, on January 7 to ring in the New Year, the Court of Federal Claims denied the relief, reasoning in the following excerpts (emphasis supplied):
The Tax Court's decision is not controlling authority in this Court. See Otis Elevator Co. v. United States, 618 F.2d 712, 719 (Ct. Cl. 1980) (finding that Tax Court decisions are not controlling law in the Court of Federal Claims). At best, this decision provides persuasive authority. However, what little persuasive value the decision might have is undermined by the fact that the Court has already considered and rejected the arguments advanced in BB&T's motion. A motion for reconsideration is not an opportunity for the losing party to retread old arguments from earlier briefs as BB&T attempts to do here. In its RCFC 59(e) motion, BB&T argues that it paid interest on a bona fide loan, the proceeds of which were available for it to use in its banking business. Similarly, in its post-trial briefing, BB&T argued that the Court should find that the Loan had a non-tax purpose and non-tax effects such that the Court should allow BB&T to deduct interest payments made on the Loan. See BB&T Post-Trial Br., Dkt. No. 210 at 242-46. The Court rejected the argument in BB&T's post-trial brief and found that the STARS Loan lacked economic substance because it was devised solely to provide BB&T with a pretext for engaging in a sham transaction. Salem, 112 Fed. Cl. at 587. The Tax Court's decision in Bank of New York provides no basis for the Court to revisit arguments that have been litigated, considered by the Court, and rejected.
BB&T raises one new matter that differs from its post-trial brief when it argues that the Loan was commercially viable on its own because it did not assist as a technical matter in the claim for foreign tax credits. As described below, the Court rejects the argument that the Loan was commercially viable on its own. However, even if this was not the case, the Court would not consider this argument. A motion for reconsideration may not be used to raise an issue that was available to be litigated at the time the complaint was filed, and this argument was available to BB&T when it filed its post-trial brief. Thus, BB&T has failed to meet the standard for reconsideration and its motion is denied.In addition, the New York Mellon case was factually different based on the difference between the Tax Court's findings and the Court of Federal Claims findings (or lack of findings because of lack of proof).
I am sure BBT will appeal the entire loss to the Court of Appeals for the Federal Circuit to test that court's appetite, somewhat limited at this point, for bullshit tax shelters.