| Sub S Accounting Treatment of FDIC Prepaid Assessments Unclear |
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10/1/2009 |
On Tuesday, September 29, 2009, the FDIC Board of Directors voted unanimously to propose a rule that would require banks to prepay, on December 30, 2009, assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The FDIC estimates that the proposal would raise approximately $45 billion for the Deposit Insurance Fund. Below is a link to the FDIC's press release announcing the proposed rule:
http://www.fdic.gov/news/news/press/2009/pr09178.html
On a conference call following the announcement, FDIC Chairman Shelia Bair and her staff said that there is currently no provision for special tax treatment of the assessment for Sub S banks and invited comments from S corp institutions in the days to come.
Under current rules, Sub S banks are only permitted to take deductions one year in advance. Absent a special ruling by the FDIC, for the current year, Sub S banks would only be permitted to deduct assessments for 2009 and 2010. The amount of the 2011 prepaid assessment would be deductible in 2010; and the amount of the 2012 prepaid assessment would be deductible in 2011.
According to Executive Director Bruce Toppin, the Subchapter S Bank Association will file a comment on the FDIC's proposed rulemaking in hopes that the FDIC and IRS will work to adopt a plan where all of the prepaid assessments will be deductible in the current year. |
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