In a collaborative report issued yesterday by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, Wells Fargo & Co (NYSE:WFC) headed the list of companies taking advantage of federal income tax subsidies over the last five years to the tune of $21.6 billion.

Wells Fargo

The group, whose mandate is tax fairness, published a three year report in November 2011 that pointed out $18 billion in tax breaks from Wells Fargo & Co (NYSE:WFC) making yesterday’s findings almost expected.

How the report was compiled

The report takes the statutory corporate rate of 35% and compares it to what the companies reported paying in federal income tax. The difference between the figures, through the use of congressional tax breaks, is viewed as a subsidy to the Citizens of Tax Justice.

The subsidies vary from accelerated depreciation, which allows for writing off of capital assets at a faster rate than their actual depreciation, to allowing a company to write off the income tax that their employees paid (personally) on exercised stock options. For tech companies that throw around options generously, this can work out to be a huge write-off.

Facebook Inc (NASDAQ:FB) “used this single tax break to zero out all income taxes on a billion dollars of U.S. profit in 2012,” the report says.

Other tax breaks are company- or industry-specific. For instance, breaks for oil and gas drilling, making movies, designing video games and even building NASCAR ovals for “rednecks to turn left.”

Robert McIntyre, director of Citizens for Tax Justice, explained Wells Fargo’s “subsidies” succinctly: “They make a lot of money, they have a lot of tax breaks.” In five years, Wells Fargo paid taxes on U.S. profits at an effective rate of 12.2%.

Wells Fargo & Co (NYSE:WFC) enjoyed the largest subsidy by dollar volume because it’s so profitable, says McIntyre.

The report says Wells Fargo & Co (NYSE:WFC) paid about $11.6 billion in federal income tax over five years on $94.7 billion in U.S. profit, an effective rate of 12.2 percent. Just as Mitt Romney pointed out when he released his taxes, a Wells spokesman said that the bank “fulfills its tax obligations,” and that “Over the past 10 years, Wells Fargo & Co (NYSE:WFC) and Wachovia combined have paid more than $40 billion in U.S. federal and state corporate income taxes.”

What about Apple and Microsoft?

The report excluded 17 companies that were profitable for the same years without a “plausible” breakdown of their U.S. and foreign profits. Essentially, by excluding these companies, the report almost accuses companies of shifting U.S. profits to overseas tax havens. Apple, Amgen, Inc. (NASDAQ:AMGN), Dell Inc. (NASDAQ:DELL), Google Inc (NASDAQ:GOOG), eBay Inc (NASDAQ:EBAY), Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO) and Gilead Sciences, Inc. (NASDAQ:GILD) were all excluded from the report.

As corporate tax returns are not made public, the report focused on the annual reports that the companies made to the SEC and their shareholders.