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Citigroup in row over $50bn of deferred tax
CITIGROUP, the American behemoth, is embroiled in a dispute with analysts and accountants over whether it should store up capital to cover $50bn (£32.4bn) of deferred taxes.
Citi says it will earn enough cash to justify ignoring the need to hold reserves against the deferred charges. But critics say the necessary target – $99bn of taxable income over the next two decades – is too optimistic.
Citi had annual pre-tax profits in excess of $20bn between 2002 and 2006 but recorded crippling losses during the financial crisis. Its annual pre-tax deficit topped $60bn in both 2008 and 2009.
The US Securities and Exchange Commission looked into the matter last year. But it is not known if the watchdog is still investigating.