Poor Little TARP BanksMay 28, 2009 - by Donny Shaw
The big banks, like Bank of America, Citigroup and JP Morgan Chase, have been getting just about anything they want out of Washington these days. There is one thing, however, that so far they have been denied: the ability to get instant refunds on taxes paid on past profits up to five years back, or “carry-back” relief.
In the economic stimulus bill (H.R. 1) Congress extended carry-back relief to businesses with less than $15 million in annual revenues that have not taken TARP money. More recently, bipartisan legislation has been introduced in both the Senate and the House to extend carry-back relief to businesses of all sizes, except those that have taken TARP money.
Now the bailed-out banks have begun lobbying to get their
fair share. Subscription-only Congress Daily reports:
The financial services industry has broken its silence on being excluded from a tax break for struggling businesses. In a recent letter to Treasury Secretary Geithner, trade groups including the American Bankers Association, the Financial Services Roundtable and the Securities Industry and Financial Markets Association urged him to endorse their eligibility for a five-year net operating loss “carry-back” period, which lawmakers have declined.
“We urge you to promote NOL carry-back relief for all industries, without exclusions. Making NOL carry-back relief available to all taxpayers represents sound policy and would best speed economic recovery,” the trade groups wrote in a letter dated May 20. Signatories include the Financial Services Forum, the Clearing House Association and Independent Community Bankers of America. The last could be crucial to the effort, as it represents smaller banks.
In their letter last week, financial services firms said barring them from the NOL language could prolong the recession. “Such an exclusion would run directly counter to the goals of the administration and the TARP – e.g., facilitating the extension of credit by improving the capital position of lenders – and potentially would discourage future participation in the TARP and similar programs intended to help stabilize the economy,” they wrote.
Pictured above is Bank of America CEO Ken Lewis.