BofA Taxes Audited Over Retirement Plans

Bank of America Corp. said Tuesday that the Internal Revenue Service was auditing the company’s 1998 and 1999 tax return information related to employee retirement plans.

The audit focuses on whether voluntary employee transfers of 401(k) assets into the Bank of America pension plan were legal, the Charlotte, N.C.-based bank said in its quarterly filing with the Securities and Exchange Commission.

Bank of America employees in July filed a lawsuit alleging that the company violated the Employee Retirement Income Security Act when $2.7 billion was moved from 401(k) plans to pension plans after the merger of BankAmerica Corp. and NationsBank Corp. The suit, filed in U.S. District Court for the Southern District of Illinois, names Bank of America, PricewaterhouseCoopers and bank executives and directors.

The transfers let the bank “attempt to earn arbitrage-like profits from the investment of participants’ retirement savings without returning those profits back to the 401(k) plan or its participants,” according to the lawsuit.

“We believe that our plans have been designed and administered in accordance with applicable law,” Bank of America spokeswoman Eloise Hale said. “We intend to defend ourselves vigorously against the claims.”