Citigroup Gets Huge Tax Break – The IRS and the Treasury Department gave Citigroup a huge multi-billion dollar tax break at taxpayers expense.
As a result, the government will be collecting billions of dollars less in taxes from Citigroup as part of a negotiated deal to pay back federal bailout money.
The IRS has granted an exemption from tax rules relating to Citigroup and other companies that are or were partially owned by the government via the TARP bailout program.
Citigroup says it has built up $38 billion in losses and, with the tax exemption, it will be able to shelter up to $38 billion in future profits from taxation.
The future taxes being forfeited will likely amount to several billion dollars, accounting experts tell the Washington Post, and likely much higher than the profit the government says it will get when it sells its share of Citigroup.
Without the IRS exemption, Citigroup would have lost billions of dollars in tax exemptions when the Treasury sells off its stake in the bank.
A Treasury spokeswoman insists that the rule Citigroup is being exempted from was never meant to apply to this “unprecedented situation.”
Basically, Citigroup gets rewarded for making extremely risky, highly leveraged transactions and helping ruin the economy.
First, we bail them out and then we waive taxes on their next $38 billion in profits.
No doubt, Citigroup will reward its executives with huge bonuses for a job well done.
And that’s the latest news on Citigroup gets huge tax break.
Tags: bailout firms owe back taxes, bailout tax breaks, citigroup, citigroup gets huge tax break, irs, tarp bailout