In Citi's tax plan, analyst sees much needed protection

Citigroup (C) raised some eyebrows last week when it unveiled a "tax benefit preservation plan" designed to make it very difficult for anyone to amass a big stake in the beleaguered bank. Was this, as Citi claimed, a necessary step to safeguard some $44 billion in tax deductions? Or was it a "poison pill" designed to block takeovers, as some analysts fretted?

According to Robert Willens, a corporate tax expert and former analyst at Lehman Brothers, Citi really does need the plan to protect its massive stockpile of deductions and credits. "The greater good is probably served by them preserving their tax situation," he says.