Attorney Seeks Earlier Effective Date Under Proposed Portfolio Interest Rules

This is to comment on proposed regulation section 1.871- 14(g)(3)(i), which applies an aggregate concept in determining whether a partnership-held debt obligation is considered held by a 10% or greater shareholder of the issuer. Since this position appears to reflect the prior position of the Internal Revenue Service (see, e.g., field service advisory, 1994 WESTLAW 1866354 (February 2, 1994)), it is suggested that the final regulation be made effective as of the effective date of the underlying statute, July 18, 1984. Such an approach would avoid confusion and eliminate unnecessary disputes.