Citi Wins Massive Tax Break
Firm will use dodged fed taxes to repay fed bailout bucks
By Rob Quinn,  Newser Staff
Posted Dec 16, 2009 3:11 AM CST
Updated Dec 16, 2009 5:45 AM CST
The American flag and the Citigroup flag fly together outside Citigoup's headquarters in New York.    (AP Photo/Mary Altaffer)

(Newser) – The government will be collecting billions of dollars less in taxes from Citigroup as part of Citigroup's deal to pay back federal bailout money. The IRS has granted an exemption from tax rules relating to Citigroup and other companies partially owned by the government. The future taxes being forfeited will likely amount to several billion dollars, accounting experts tell the Washington Post.

Without the exemption, Citigroup would have lost billions of dollars in tax exemptions when the Treasury sold 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." The exemption means the Treasury will likely get a higher price for its Citi shares, although experts believe the tax loss will erase any profit it makes on the sale.

 

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