Monday, November 10, 2008
Following up on my prior post: What Is the IRS's Authority for Expanding Bailout Tax Breaks?, which discussed Notice 2008-83:
- Washington Post: A Quiet Windfall For U.S. Banks; With Attention on Bailout Debate, Treasury Made Change to Tax Policy, by Amit R. Paley:
"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."
More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice. ...
"It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"
- Citizens for Tax Justice: New IRS Ruling on Bank Acquisitions Imposes Major Federal Corporate Tax Cuts -- and Will Hurt States Too
(Hat Tip: Matt Gardner.)