The US IRS on January 11 released Notice 2016-10, describing regulations Treasury intends to release relating to the treatment under sections 853 and 905(c) of foreign tax refunds received by regulated investment companies (RICs).
The rules determine the treatment of refunds which, when paid by the RIC, were treated as paid by the RIC shareholders under section 853(b)(2) pursuant to a Section 853(a) election.
The regulations will permit a netting procedure designed to reduce the administrative costs and burdens on the US government, RICs, and the RIC’s shareholders.
The notice also provides guidelines for RICs that wish to obtain a closing agreement relating to receipt of such foreign tax refunds.
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