Bank of America was recently questioned by U.S. regulators about the potential legal and reputational risks from the maneuver, the newspaper said, citing a spokesman for the Federal Reserve Bank of Richmond.
The maneuver typically helps bank clients cut taxes from as much as 30 percent of the dividend payment to 10 percent, the newspaper said. Banks collect fees on the transactions.
Read MoreWhy traders are betting on a big finish to 2014
Other banks that arrange similar transfers include Citigroup, Deutsche Bank, Goldman Sachs, and Morgan Stanley, the newspaper said, adding that it wasn't clear if these banks have been questioned about the strategy.
Last week, the U.S. Treasury Department unveiled tough new rules on corporate ``inversion'' deals, aimed at making the tax-avoidance transactions less desirable.
Bank of America was not immediately available for comment outside regular business hours.