The Bush Administration has illegally adopted regulations under Internal Revenue Code Section 382 in Notice 2008-83, that give banks a tax break of more than $100 billion. The regulations concern the power of banks that acquire other banks that have accumulated net operating losses to apply those loses to their profits.
The banking industry has repeatedly asked Congress to amend Section 382 to permit this and been rebuffed.
The question is who has standing to challegen the illegal regulations, and whether anyone with standing will choose to do so. A challenge could threaten several bank mergers that have taken place in reliance on the illegal regulations.
Because Colorado tax laws are linked to federal tax law, this illegal regulation will also produce a significant hit to Colorado's corporate tax revenues.