The Grumpy Lion brought this to my attention:

While American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

AIG sued the government in February in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles, and other offshore havens.

AIG is effectively suing its majority owner, the government, which has an 80 percent stake and has poured $180 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that AIG is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the IRS last year.

The lawsuit, filed on Feb. 27 in US District Court in Manhattan, details, among other things, certain tax-related dealings of the financial products unit, the once high-flying division that has been singled out for AIG’s financial crisis last fall. Other deals involved AIG offshore entities whose function centers on executive compensation and include C.V. Starr & Co., a closely held concern controlled by Hank Greenberg, AIG’s former chairman, and the Starr International Co., a privately held enterprise incorporated in Panama, and commonly known as SICO.

The lawsuit contends in part that the federal government owes AIG nearly $62 million in foreign tax credits related to eight foreign entities, with names like Lumagrove, Laperouse, and Foppingadreef, that were set up or controlled by financial products, often through a unit known as Pinestead Holdings.

US tax law allows US companies to claim a credit for any taxes paid to a foreign government. But the IRS denied AIG’s refund claims in 2008, saying it had improperly calculated the credits. The IRS has identified so-called foreign tax-credit generators as an area of abuse that it is increasingly monitoring.

The remainder of AIG’s claim, for $244 million, concerns net operating loss carry-backs, capital loss carry-backs, a general refund claim, and claims for refunds of other tax-related payments that AIG says it made to the IRS but are now owed back. The claim also covers $119 million in penalties and interest that AIG says it is due back from the government.