On July 31, MFA submitted a comment letter discussing several areas of tax regulation that we encouraged Treasury to review and consider amending, in response to Treasury’s request for information on its Review of Regulations pursuant to President Trump’s Executive Order 13777, Enforcing the Regulatory Reform Agenda. In our letter, we encouraged Treasury and the IRS to: (1) issue new regulations to exclude anti-dilutive conversion ratio adjustments on convertible securities from withholding taxes under Section 305 of the Code; (2) provide additional technical guidance with respect to the safe harbor under Section 864(b) of the Code for investments in the U.S. by non-U.S. investors; (3) provide additional safe harbors or amend existing rules with respect to publicly traded partnerships to provide privately-offered investment funds more flexibility to provide liquidity to investors, in a manner consistent with the intended policy goals of the PTP rules; and (4) amend the rules regarding notional principal contracts to eliminate the asymmetrical treatment of gains and losses under those rules for investor funds.
