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Wachovia Rescue Relied on ‘Usurpation’ of Tax Law, Thomas Says

Wachovia Corp.’s 2008 rescue by Wells Fargo & Co. relied on a tax break that Congress never approved, adding to the cost of U.S. bailouts, according to the vice chairman of a panel investigating the financial crisis.

An interpretation of Internal Revenue Service rules during the meltdown that helped Wells Fargo amounted to “an unprecedented executive branch usurpation of tax law,” former U.S. Representative Bill Thomas said at today’s hearing of the Financial Crisis Inquiry Commission in Washington.