John Hancock Life Insurance Co.’s claims for deductions for a series of leveraged lease transactions were denied by the U.S. Tax Court, a decision that could cost the company as much as $560 million.

The court accepted arguments by the U.S. Internal Revenue Service that “the substance of the transactions is not consistent with their form,” and denied claims for depreciation, rental and interest expense and transaction costs, according to a ruling by Judge Harry Haines.

Haines’s ruling applies to 27 lease transactions that occurred between 1997 and 2001 and affect John Hancock’s tax liability for the same years as well as 1994.

The case is John Hancock Life Insurance Co. v. U.S. Internal Revenue Service, 70830-10, U.S. Tax Court, Washington.

Editors: Fred Strasser, David Glovin