TAXES Fightin' Fannie Vs. Uncle Sam

Fightin' Fannie Vs. Uncle Sam

Did Fannie Mae make a big mistake on her tax returns? Yes, says the Internal Revenue Service. A tax court heard arguments last week in a dispute between the IRS and the Federal National Mortgage Association, the former Government agency that is now privately owned and known as Fannie Mae. In April 1986 the IRS declared that Fannie Mae had taken improper deductions and owed some $200 million in back taxes and interest. Fannie Mae paid up, but is suing to get a refund.

The case centers on the activities of Fannie Mae, which buys mortgages from lending institutions and sells...