Participation in Treasury's Capital Purchase Program (CPP) raises a number of issues for participating financial institutions, including limitations on executive compensation. On the tax front, Treasury has issued some useful guidance (Notice 2008-100) confirming that Treasury’s preferred stock and warrant investments are to be disregarded for certain purposes of section 382, which controls net operating losses. However, Treasury has not yet issued any guidance on how its non-voting preferred stock will affect future tax-free acquisitions of participating banks, thrifts and holding companies, at least while the non-voting preferred stock is outstanding (whether in the hands of the Treasury or others). Alston & Bird has issued a Federal Tax Advisory explaining the issue.