U.S. gave up billions in tax money in deal for Citigroup's bailout repayment

[AllentownJake]

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

While the Obama administration has said taxpayers are likely to profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.

The IRS, an arm of the Treasury Department, has changed a number of rules during the financial crisis to reduce the tax burden on financial firms. The rule changed Friday also was altered last fall by the Bush administration to encourage mergers, letting Wells Fargo cut billions of dollars from its tax bill by buying the ailing Wachovia.

"The government is consciously forfeiting future tax revenues. It's another form of assistance, maybe not as obvious as direct assistance but certainly another form," said Robert Willens, an expert on tax accounting who runs a firm of the same name. "I've been doing taxes for almost 40 years, and I've never seen anything like this, where the IRS and Treasury acted unilaterally on so many fronts."

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534_pf.html

What the hell is wrong with the Obama administration?

[justabob]

1. so Citi isn't *really* repaying anything

So much bullshit.... an effing shell game.

[AllentownJake]

2. and the 60 minutes interview was a farce

You can't say you are angry at the banks, while giving them tax breaks while you are scolding them.

Watch what the administration does, not what they say.

[justabob]

3. no kidding

There is slight of hand you have to be on the lookout for too, even when watching the actions. It is so unbelievably frustrating.

[AllentownJake]

4. Well we should have known

Remember the run to Canada during the primary..."It's just campaign rhetoric" this man has been a fraud, people have been blinded by his oratory skills.

[democracy1st]

5. K & R

[MadHound]

6. Woke up a little while ago and heard this bullshit

In essence we're not getting paid back, in fact we're shelling out even more money to the banksters. The Obama administration taketh away with one hand, and giveth away even more with the other hand.

More of that "change" we were told about. :puke:

[chill_wind]

7. Unbelievable. n/t