ABA Responds to Proposed Rulemaking on Tax Settlement Agreements

The American Bankers Association today filed a comment letter responding to a notice of proposed rulemaking from the federal banking regulators that would establish requirements for tax allocation agreements between institutions and their holding companies in a consolidated tax filing group.

The proposed rule is intended to preserve depository institutions’ ownerships rights in tax refunds and ensure equitable allocation of tax liabilities in a holding company structure and codifies existing practices set forth in prior policy statements.

ABA recommended that flexibility be retained to allow for institutions and their holding companies to meet the policy objectives of the proposed rule with reasonable administrative burden and noted that new reporting requirements may require deviation from generally accepted accounting principles should be reconsidered.