Treasury, IRS Urged To Revamp Derivatives Tax Policies

Law360, New York (October 21, 2011, 7:30 PM EDT) -- The U.S. Government Accountability Office recommended Thursday that the U.S. Department of the Treasury and the Internal Revenue Service consider revamping their tax policies concerning derivatives, saying that investors are using the deals to exploit loopholes in the federal tax code.

The GAO released a report concluding that Treasury and the IRS have developed a patchwork of rules over the last three decades that does not account for many financial derivatives and is difficult to apply to new derivative instruments.

"As new products are developed, IRS...
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