It's beautiful, man.

From a BNA ($) email (sorry, no link) [link found - ed]:

The insurance company American International Group Inc. (AIG) Feb. 27 filed a complaint in the U.S. District Court for the Southern District of New York claiming that the federal government erroneously and illegally collected more than $306 million in taxes, penalties, interest, and additions to tax from AIG for tax year 1997 (American International Group Inc. v. United States , S.D.N.Y., No. 1:09-cv-01871-LLS, complaint filed2/27/09).

The complaint outlined seven transactions in which foreign tax credits were generated. It said that AIG was entitled to the full amount of the foreign tax credits totaling $61.9 million described in the seven transactions and because the IRS erroneously denied the disallowed foreign tax credits, AIG was entitled to a refund for 1997.

It sort of makes sense in a circular logic kind of way: AIG, which is largely owned by the government (i.e. you and me), loses 62 billion taxpayer (i.e. you and me) dollars last quarter -- the largest quarterly loss by a firm ever --and has to somehow make up some of that loss...by suing the the very same government (i.e. you and me) that owns the firm. So, we're suing ourselves to get money we collected some years ago, while tens of billions of our funds that we gave ourselves evaporate from our firm's books? Riiiiight.

And get this:

The government is not only rolling back punitive restrictions from the first, September bailout terms but also giving AIG much better treatment than strong companies can expect to get in the markets. As today’s Wall Street Journal points out, when the AIG rescue was set in September “federal officials acted as a demanding lender, forcing the insurer to pay a steep interest rate for what was expected to be a short-term loan. Now the government is relaxing loan terms by wiping out interest in hopes of preserving AIG’s value over a longer period.”

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