July 18, 1991
TO: TAX COMMITTEE NO. 24-91
TRANSFER AGENT ADVISORY SUBCOMMITTEE ON SHAREHOLDER BASIS
REPORTING
RE: AUGUST 1, 1991 MEETING ON SHAREHOLDER BASIS REPORTING
__________________________________________________________
As we previously informed you, a "mutual fund tax bill",
H.R. 2735, has been introduced by House Ways and Means Committee
Chairman Rostenkowski and several others, including the ranking
minority member on the Committee, Congressman Archer. (See
Institute Memorandum to Tax Committee No. 20-91, Operations
Committee No. 21-91, Accounting/Treasurers Committee No. 14-91,
and Transfer Agent Advisory Committee No. 31-91, dated June 25,
1991.) One section of the bill would amend the reporting
requirements of Internal Revenue Code section 6045 to impose upon
mutual funds and brokers the obligation to provide to
shareholders and the Internal Revenue Service average cost basis
information for shares redeemed.
Any Congressionally-mandated shareholder basis reporting
requirement would raise numerous tax and operational issues. As
the House Ways and Means Committee anticipates holding hearings
on this bill in September, a meeting to discuss shareholder basis
reporting issues will be held at the Institute on Thursday,
August 1, 1991 at 10:00 a.m. Lunch will be served following the
meeting. If you plan to attend the meeting, please let
Berlaunder Barnes at the Institute (202/955-3518) know by Monday,
July 29.
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax