IRS Insights On Repeal Of The Bearer Bond Exception

Law360, New York (March 30, 2012, 1:20 PM EDT) -- As a result of the repeal of the foreign-targeted bearer bond exception by the “Hiring Incentives to Restore Employment Act” (the “HIRE Act”), U.S. bonds issued after March 18, 2012 generally must be in registered form in order for the issuer to benefit from deductibility of interest payments and for foreign holders to obtain “portfolio interest” payments exempt from U.S. withholding tax.[1]

On Wednesday, March 7, 2012, the Internal Revenue Service released Notice 2012-20 (the “Notice”) which provided guidance (i) clarifying when an obligation will be...
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