FROM THE OFFICE OF PUBLIC AFFAIRS
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August 24, 2004
JS-1873
Treasury and IRS Request Comments on Remic Issues
The IRS and Treasury Department today requested comments on the tax treatment of interest-only regular interests (I/Os) in a Real Estate Mortgage Investment Conduit (REMIC).
REMICs I/Os entitle the holders to a specified portion of the interest paid on the pool of mortgages held by the REMIC, but not to any principal payments. The total interest payments may be less than the amount for which the I/O was originally issued. As a result, the tax results sometimes differ substantially from the economics of the transactions.
The request for comments discusses two possible solutions. "The solutions outlined in the notice are intended to prompt a meaningful dialogue, including suggestions regarding alternatives," commented Greg Jenner, Acting Assistant Treasury Secretary for Tax Policy. "They demonstrate our willingness to consider innovative approaches. We hope to attract the sort of creative comments that are necessary to address the difficult issues inherent in the taxation of REMIC I/Os."
The request for comments was filed this morning at the Federal Register and will be published August 25, 2004.
REPORTS