A federal judge ruled against Hewlett-Packard in a case involving more than $190 million in refunds associated with a Dutch tax shelter. The dispute began in 2009 after HP sued the IRS for more than $190 million in tax refunds the company claimed it was owed from 1996, after implementing a cost-cutting tax strategy established by the derivatives trading sector of the American International Group, according to Reuters. The strategy - named the foreign tax credit generator - revolves around trading derivative products to generate capital losses and foreign tax credits for corporations, which then utilize them to lower tax bills, the news source explains. U.S. companies use the strategy to invest in foreign low-tax jurisdictions, and then claim tax-lowering credits for payments owed to the foreign entities on those investments, Reuters adds. While the IRS allows for some foreign tax credit generators, they outlawed most of these practices in 2007, claiming that many of the strategies are purposefully designed to create superficial beneficials that are not valid under federal tax law. Judge Joseph Goeke of the U.S Tax Court in Washington, D.C., agreed with the IRS in his 82-page opinion. He noted that HP's investments in the Dutch entity, Foppingadreef, were not real economic bets, and were instead considered carefully structured loans to the entity, which were repaid. "HP's investment is more appropriately characterized as debt, rather than equity, for Federal income tax purposes," Judge Goeke wrote. Both HP and the IRS have not commented on the ruling, but HP is also still battling the IRS in a separate case to recover additional funds from three other years.