May 21 (Reuters) - Bank of America ( BAC ) has asked a

U.S. appeals court to revive its lawsuit seeking more than $163

million in interest from the Internal Revenue Service in a

dispute over tax liability involving mergers, including its 2013

tie-up with Merrill Lynch.

Bank of America ( BAC ) in a Monday night court filing told the

Richmond, Virginia-based 4th U.S. Circuit Court of Appeals that

a judge "rewrote" a key federal tax provision when he

substantially rejected the case last year. The bank called the

decision "unfair to taxpayers."

The bank sued the IRS in North Carolina federal court in

2017, claiming it was owed tax-related interest related to a

series of mergers.

Federal law allows a taxpayer to "net," or cancel out,

interest owed on both underpayments and overpayments of taxes. A

central question in Bank of America's ( BAC ) case is whether it was the

"same" taxpayer after the mergers, making "interest netting"

available.

Bank of America ( BAC ) declined to comment on Tuesday. The Justice

Department did not immediately respond to a request for comment.

U.S. District Judge Robert Conrad said in his 2023 ruling

that "because two corporations are separate taxpayers before

they merge, their premerger underpayments and overpayments were

not made by the same taxpayer."

Conrad allowed Bank of America ( BAC ) to take an immediate appeal,

writing that "there is substantial ground for difference of

opinion on the interest-netting issue in this case."

In the appeals court, Bank of America ( BAC ) said Conrad

"overlooked" a central part of state merger law that says the

remaining company after a merger is considered to be the "same

taxpayer" as the merged companies.

The bank said that under relevant state law, "the survivor

of a corporate merger is responsible for all of the assets and

liabilities of the merged companies, including tax overpayments

and underpayments."

Bank of America ( BAC ) said that as the "surviving" company it

should have been allowed to net the interest on pre-merger tax

overpayments by Merrill Lynch, and an underpayment by Bank of

America ( BAC ).

"The overpayments and underpayments at issue were 'by the

same taxpayer,'" Bank of America ( BAC ) told the appeals court. "Bank

of America ( BAC ) is the 'taxpayer.'"

The case is Bank of America Corp ( BAC ) et al v. United States, 4th

U.S. Circuit Court of Appeals, No. 23-2319.

For Bank of America ( BAC ): Nicole Saharsky of Mayer Brown

For United States: Norah Bringer of the Justice Department

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