The Internal Revenue Service is checking out dozens of participants in a financial arrangement to see if they are reaping illegal tax benefits by underreporting income on mortgage-backed securities, which make up the bulk of the multitrillion-dollar market for asset-backed securities.
The inquiry, which an I.R.S. official said yesterday was in its early stages, concerns the use of arcane but powerful investment entities known as real estate mortgage investment conduits.
Remics, as they are called, are a complex legal entity through which the vast majority of mortgage-backed securities are sold.
The I.R.S. is looking at whether companies and firms that set up remics â including the giant housing agencies Fannie Mae and Freddie Mac, as well as Wall Street investment banks, commercial banks and other mortgage originators â have undervalued the interest earned on those securities and thus underpaid their federal taxes, according to a senior I.R.S. official, Barry Schott.
http://www.nytimes.com/2007/10/13/business/13tax.html?_r=1&ref=business&oref=slogin
IRS wants always its part of the cake...
The inquiry, which an I.R.S. official said yesterday was in its early stages, concerns the use of arcane but powerful investment entities known as real estate mortgage investment conduits.
Remics, as they are called, are a complex legal entity through which the vast majority of mortgage-backed securities are sold.
The I.R.S. is looking at whether companies and firms that set up remics â including the giant housing agencies Fannie Mae and Freddie Mac, as well as Wall Street investment banks, commercial banks and other mortgage originators â have undervalued the interest earned on those securities and thus underpaid their federal taxes, according to a senior I.R.S. official, Barry Schott.
http://www.nytimes.com/2007/10/13/business/13tax.html?_r=1&ref=business&oref=slogin
IRS wants always its part of the cake...