April 2, 1993
TO: TAX COMMITTEE NO. 18-93
RE: APRIL 14 MEETING ON DIVIDENDS PAID DEDUCTION FOR
REDEMPTION PROCEEDS
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As we previously informed you, the IRS' 1993 business plan
includes a project to develop "a revenue ruling on the portion of
earnings and profits an open-end fund may allocate to a redeeming
shareholder for purposes of the dividends paid deduction," also
known as "tax equalization." (See Institute Memorandum to Tax
Committee No. 7-93, Accounting/Treasurers Committee No. 5-93,
dated January 21, 1993.) During yesterday's Tax Committee
meeting, the group considered the IRS' interest in the issue and
possible solutions to the IRS' concerns, all of which are
reflected in the attached memorandum. At the conclusion of this
discussion, it was agreed to reconvene the Tax Committee to
further consider the issue.
Consequently, a meeting devoted exclusively to "tax
equalization" will be held at the Institute on Wednesday, April
14, beginning at 10:00 a.m. Lunch will be served following the
meeting. Please call Theresa Brice at (202) 955-3525 by Monday,
April 12 if you plan to attend the meeting. A draft of the
factual portion of a possible revenue ruling will be distributed
prior to the meeting to those persons calling Theresa.
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax
Attachment