The Internal Revenue Service (the “IRS”) on October 14, 2008 issued Notices 2008-100 and 2008-101 (the “Notices”) to provide guidance to banks participating in the Federal government’s Capital Purchase Program (the “CPP”), included as part of the Emergency Economic Stabilization Act of 2008’s Troubled Asset Relief Program (the “TARP”).  The Notices provide for exceptions to the application of certain provisions of Sections 382 and 597 of the Internal Revenue Code of 1986 (the “Code”) in the case of capital infusions from the Treasury Department pursuant to the CCP.  Notice 2008-100 provides guidance to corporations regarding the application of Section 382 of the Code.  Notice 2008-101 provides guidance regarding the application of the “Federal financial assistance” provision contained in Section 597 of the Code. [Read more →]

The federal banking agencies (the “Agencies”) will allow banks, bank holding companies and thrifts to recognize the effect of a tax change enacted in Section 301 of the Emergency Economic Stabilization Act of 2008 (the “EESA”) in their regulatory capital calculations for the third quarter of 2008. [Read more →]

The Internal Revenue Service (the “IRS”) on September 30, 2008 issued Notice 2008-83 to provide guidance to banks in the current volatile economic environment. Notice 2008-83 provides that properly allocable deductions by a bank of losses on loans or loan loss reserves will not be treated as attributable to periods prior to an ownership change pursuant to section 382(h) of the Internal Revenue Code (the “Code”). In general, Section 382 of the Code limits a corporation’s deduction for net operating loss carryovers and recognized built-in losses subsequent to an ownership change. An ownership change, as defined in section 382(g) of the Code, is, generally, a change of 50% or more of the ownership of a corporation within a three-year period. [Read more →]