Comment Letter Regarding FATCA (Notice 2011-34)

MFA filed a comment letter with Treasury and the Internal Revenue Service in response to their draft guidance on implementing FATCA. In our letter, we encouraged Treasury and the IRS to: (1) provide investment funds that are deemed foreign financial institutions (FFIs) under FATCA flexibility in how they calculate amount that are subject to withholding as passthru payments and to consider narrowing the scope of passthru payments to mitigate potential unintended consequences such as discouraging foreign investment in the U.S.; (2) clarify that non-U.S. natural persons and U.S. tax exempt entities are permissible investors for deemed-compliant investment funds; (3) allow funds to rely on certifications in determining whether entity investors are participating FFIs or deemed compliant FFIs; and (4) clarify that investment funds can designate the person or entity responsible for fulfilling the funds FATCA compliance functions and that funds with a common manager can elect to centralize their compliance obligations under a single agreement.

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