Tuesday, September 22, 2015
Following up on my previous posts (links below): Bloomberg, Warren Pushes Treasury to Finalize Private Equity Fee Rule:
Senator Elizabeth Warren urged the Treasury Department to finalize its rule limiting the tax benefits enjoyed by private equity managers.
Warren, a Massachusetts Democrat, sent a letter Monday to the Treasury calling for quick finalization and swift enforcement of the rule. Warren sent the letter along with Senate Democrats Al Franken of Minnesota, Tammy Baldwin of Wisconsin and Sheldon Whitehouse of Rhode Island.
In July the Treasury proposed limiting the practice of reducing private equity tax bills by reclassifying how management fees are taxed. The rule would make it harder for firms to convert fees subject to high taxes into lower-taxed carried interest and take advantage of a 19.6 percentage-point difference in top tax rates. Comments on the rule are due by Oct. 21.
Prior TaxProf Blog coverage:
- Gregg Polsky, Private Equity Management Fee Conversions (Feb. 11, 2009)
- NY Times, A Tax Tactic That’s Open to Question (Sept. 14, 2012)
- WSJ, IRS Reviews Private Equity Management Fee Waivers (May 13, 2013)
- Andy Grewal, Mixing Management Fee Waivers with Mayo (Oct. 8, 2013)
- WSJ, Private Equity Firms Save Millions in Taxes by Treating Dividends as 'Monitoring Fees,' Says Polsky (Feb. 3, 2014)
- NY Times, Tax Expert Sees Abuse in a Stream of Private Equity Fees (Feb. 3, 2014)
- Gregg Polsky, A Compendium of Private Equity Tax Games (Nov. 24, 2014)
- UK to Kill Private Equity Management Fee Waivers (Mar. 27, 2015)
- NY Times, IRS Shuts Down Private Equity Management Fee Waiver Tax Game (July 23, 2015)