Depository institutions in consolidated groups would be required to enter into “tax allocation agreements” with other members of their group that join in the filing of a consolidated tax return under a proposed rule published May 10 by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.
The proposed rule would set forth a methodology for tax payment obligations between such institutions and their parent holding companies and specify how the institution should be compensated for the use of its tax assets, including net operating losses and tax credits.
Under the rule, tax allocation agreements would be required to include certain information, such as the timing and amounts of any tax payments, as well as an acknowledgment of any agency relationships between institutions and the holding companies with respect to tax refunds received. The rule would also clarify the regulatory reporting treatment of an institution’s deferred tax assets.
Comments on the proposed rule are due by July 9.
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