Archive - March 2015
SIFMA asks Treasury to Resolve FATCA “Self-certification” FAQ 10 Confusion
The Securities Industry and Financial Markets Association (“SIFMA”) recently sent a comment to the U.S. Department of the Treasury asking for clarification regarding the following issue: Can FFIs residing in IGA 1 or 2 countries open an account as a U.S. reportable account for an investor who does not provide FATCA self-certification to the FFI? Currently FAQ 10 of the general compliance FAQ guidance (found here) provides a resounding NO. Pursuant to section III, paragraph B, of Annex I of the IGA, the FFI must obtain a self-certification at account opening. If the FFI cannot obtain...
March 31, 2015 read more
Regulation 1.1092(d)-1(d) in Action: Per CCA 20151201F a Contingent Payment Debt is a Straddle “Position.”
This CCA 20151201F was just released and it reiterates the IRS’ longstanding position that a debt could be a “position” with respect to personal property, and therefore can be a part of a straddle, with the ultimate result of disallowing any interest deduction on the debt under IRC §263(g)(1). This is not a new position from the Service, but the ruling is notable because it appears to be the first ruling that relies on Regulation §1.1092(d)-1(d) which was promulgated in August last year.In that past, some hedge funds would take the view that debt could be a “position” in...
March 23, 2015 read more
Senate Committee on Finance: Use of Collars, Forwards, Swaps and Other Derivatives Decrease Taxpayer Equity
The Senate Committee on Finance came out with a report a few days ago titled “How Tax Pros Make the Code Less Fair and Efficient: Several New Strategies and Solutions.” In the report, the Committee outlines various uses of derivatives that according to the Committee make the Code unfair to the average Joe. The report takes the form of a comparison of the taxes that a middle class American family earning $100k would pay and the taxes a sophisticated party with a derivative market counterparty connection would pay. You would guess what the drift of the report is. Average Joe...
March 05, 2015 read more