Tax Anticipation Bill [TAB] Law and Legal Definition

Tax Anticipation Bill is a short-term debt security issued by the U.S. Treasury to raise funds during a period when tax receipts are not large enough to cover current disbursements. It can be used at face value upon maturity or a few days before to pay a federal tax obligation. The attractiveness of TABs is that the government will accept them in payment for taxes at their face value. These securities appeal primarily to corporations and relatively large investors with significant tax obligations.