Citi Bank and tax accounting

A few blogs are talking about the tax consequences for Citi as a result of the tax changes.  Here is Matt Levine:

Citigroup Inc.'s $23 billion of tax expense last quarter wasn't real. Oh sure if you look at Citi's financial statements, you will see $23 billion of taxes, but it is not like Citi wrote a check to the Internal Revenue Service for $23 billion in December. Instead, most of that number came from an abstract adjustment to an abstract accounting notion: Citi lost a bunch of money in the past, and it can use those losses to offset its taxable income in the future, and it treats those future offsets as an asset (a "deferred tax asset") on its balance sheet, and when the recent Tax Cuts and Jobs Act reduced the corporate tax rate, the value of those offsets went down, and so Citi had to write down that asset. Even though Citi's future taxes will actually go down, not up. 

Citi does long term tax planning, not for itself directly, but to maintain its position in the debt cartel.  They have their people and wealthy customers talking about Treasury debt needs, and where the do-re-me comes from.  But they talk officially, in debt planning committees with Treasury. The have folks in the administration, and share inside information with senators.

This is triple entry accounting, I say we keep it, formalize it, fair trade it and make pits that can handle it.  We have gone through what our theory says about window sizes for this three way interleave, we got the algebra.