MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
|
|
MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, December 24, 2009 Rangel Aims to 'Modernize' Mutual Fund Tax Rules Congressmen Charlie Rangel (D-New York) and Richard Neal (D-Massachusetts) think many mutual fund tax rules are archaic and have introduced new legislature designed to 'modernize' and upgrade existing regulations. Rangel, chairman of the Ways and Means Committee, and Neal, the Select Revenue Measures Sub-committee chairman, partnered with committee members Joe Crowley (D-New York) and Allyson Schwartz (D-Pennsylvania) to craft H.R. 4337 -– the Regulated Investment Company Modernization Act of 2009 -– the first legislative reform of tax rules that relate to registered investment companies to be introduced in almost twenty years. “Today's investors face a wide spectrum of investment options, and we need to make sure that our tax laws are keeping pace with these choices,” stated Rangel (D-NY). “By modernizing the rules that apply to RICs, we can help minimize difficulties for funds and investors.” In addition to modernizing tax codes via technical changes, the legislature aims to excise tax interactions by removing problems that often arise for mutual funds and their shareholders stemming from the interaction between the excise tax on the undistributed income of RICs –- enacted in 1986 –- and other tax rules that apply to mutual funds. Furthermore, the proposed reforms intend to smooth over obstacles that arise due to the interaction of general corporate tax rules that apply to redemptions and dividends and the special tax rules that mutual funds are subject to because they are regulated investment companies under tax code. “These reforms have been discussed for many years and the time has come to do simple and inexpensive updates to the code as it applies to mutual fund companies,” Neal stated. “For example, with the substantial changes to Form 1099 reporting, we need to conform the tax code rules for regulated investment companies so they are not operating under two conflicting sets of rules." Printed from: MFWire.com/story.asp?s=23630 Copyright 2009, InvestmentWires, Inc. All Rights Reserved |