1 See Institute Memorandum to Tax Committee No. 23-95 and Accounting/Treasurers Committee No.
22-95, dated June 16, 1995.
November 2, 1995
TO: TAX COMMITTEE No. 33-95
ACCOUNTING/TREASURERS COMMITTEE No. 45-95
RE: INSTITUTE PREFERENTIAL DIVIDEND SUBMISSION
______________________________________________________________________________
As you know, in June the Institute submitted to the Internal Revenue Service ("IRS") a
memorandum urging that (1) the separate classes of a multiple-class fund be respected for
section 562(c) preferential dividend purposes and (2) published guidance be issued indicating
the circumstances under which the IRS would not assert that dividends paid by a multiple-class
fund are preferential.1 This memorandum subsequently was discussed in an Institute meeting
with IRS staff attorneys and a few of their supervisors.
Recently, we met with three senior members of the IRS Financial Institutions and
Products group to discuss (1) our June submission and (2) certain preferential dividend issues
for funds of funds that are being considered in a private letter ruling request. The attached
letter and accompanying memoranda respond to various "multiple-class" issues that were
raised during the recent meeting. A separate memorandum on "fund of funds" issues will be
submitted soon.
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax
Attachment