The Federal Reserve, FDIC and OCC Release Proposal on Tax Allocation Agreements and Invite Comment

On May 4, 2021, Cravath prepared for its clients a memo entitled “The Federal Reserve, FDIC and OCC Release Proposal on Tax Allocation Agreements and Invite Comment,” which examined a newly proposed rule that would codify, and make additions to, existing guidance on income tax allocation agreements among banks and their holding companies and affiliates. The rule, proposed by the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, would require any bank that files federal or state income tax returns as part of a consolidated group that includes members other than the bank and its subsidiaries to enter into a tax allocation agreement containing specified terms. The memo provides insight on general requirements included in the rule, required provisions for tax allocation agreements and other considerations relevant to banks during tax filing.

Please click here to read the memo.