Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
Financial Institution Letter
Proposed Rule for Income Tax Allocation Agreements


The federal bank regulatory agencies invite comment on a proposed rule that updates and codifies existing guidance on income tax allocation agreements involving depository institutions and their affiliates.  Under the proposed rule, banks that file tax returns as part of a consolidated tax filing group will be required to enter into tax allocation agreements with their holding companies and other members of their consolidated group.  The proposed rule also describes the provisions required to be included in those agreements and specifies regulatory reporting treatment.

Statement of Applicability: This Financial Institution Letter (FIL) applies to all FDIC-supervised banks and savings associations, including community institutions, that (together with a parent holding company) file tax returns as members of a consolidated group.


  • Under the proposal, institutions would be required to enter into tax allocation agreements with their holding companies and other members of the consolidated group that join in the filing of a consolidated group tax return.
  • The proposal would require institutions to include provisions in tax allocation agreements that address:
    • The timing and amounts of any payments for taxes due to taxing authorities;
    • The acknowledgment of an agency relationship between holding companies and their subsidiary institutions with respect to tax refunds;
    • The payment of compensation to an institution if its loss or credit is used to reduce the consolidated group’s overall tax liability;
    • The payment of hypothetical refunds to an institution if it would have received a refund as a separate entity; and
    • The requirement that documents, including tax returns, relating to consolidated or combined federal, state, or local income tax filings be made available to an institution or any successor during regular business hours.

  • If the agencies were to adopt the proposal as a final rule, the agencies would rescind the interagency policy statement on tax allocation agreements in a holding company structure that was issued in 1998 and supplemented in 2014.
  • Comments must be received within 60 days of the proposed rule’s publication in the Federal Register .


FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer
Chief Financial Officer
Board of Directors

Last Updated: April 22, 2021