Letter Regarding Inclusion of Section 864(b) Guidance in IRS 2011-12 Business Plan

MFA submitted a comment letter to the Internal Revenue Service in response to the IRS request for suggestions on issues to include on their 2011-2012 Guidance Priority List. In our letter, we encouraged the IRS and Treasury to include providing additional guidance under Section 864(b) of the Tax Code, which provides a safe harbor for proprietary trading in stock, securities, and commodities by passive non-U.S. investors, on its List. We expressed that the absence of guidance with respect to certain types of investments, including distressed debt, creates uncertainty regarding tax risks for market participants and that this uncertainty results in economically desirable transactions not being consummated.