A few weeks ago, we mentioned the Treasury Department's decision to change a bit of the tax code that would give banks some $140 billion in tax breaks without authorization from Congress. By many accounts, the action was simply illegal. Rep. Lloyd Doggett (D-TX) Sen. Bernie Sanders (I-VT) have introduced legislation -- H.R. 7300 and S. 3692, respectively -- that would reverse this change in the tax code and plainly state that "yes, this means banks must follow this law too." OMB Watch has signed on to a letter authored by Citizens for Tax Justice to ask Congress to pass the Doggett-Sanders bill. IRS Notice 2008-83 essentially repeals, for banks only, Section 382 of the tax code, which prevents companies from using the losses of companies they acquire to reduce their own tax liability. Section 382 was enacted by Congress in 1986 to stop companies from sheltering their income by purchasing shell companies with losses on their books. Before that time, many mergers took place not because they made economic sense but merely because they offered a tax shelter. Ever since Section 382 was enacted to end these abuses, corporate lobbyists have been promoting its repeal. Lawmakers and advocates who support measures to stimulate the economy through extending unemployment insurance benefits, nutrition programs or assistance to state governments have been locked in difficult negotiations to craft legislation that can pass in both chambers of Congress. Now it appears that many of the lobbyists promoting the repeal of Section 382 have not been held to the same standard. The change they sought, which costs more than the measures mentioned above, has been accomplished through a two-page notice that directly contravenes the explicit intent of a statute enacted by Congress. S. 3692 and H.R. 7300 would reverse the Treasury notice so that Section 382 would once again be an effective block on tax shelters. Image by Flickr user Thomas Hawk used under a Creative Commons license.