1 See Institute Memorandum to Tax Committee No. 15-97, dated April 23, 1997.
2 In Technical Advice Memorandum No. 9345003, dated July 15, 1993, the IRS concluded that the fund’s distributor may deduct currently commission payments to brokers and need not include in
income at the time of sale the compensation income that may be paid to the distributor under a 12b-1 plan. At the May 9 meeting of the American Bar Association’s Tax Section, an IRS
spokesperson indicated that the TAM’s conclusion regarding timing of income is being reconsidered.
VIA FAX
May 20, 1997
TO: TAX COMMITTEE No. 17-97
TASK FORCE ON ADVISER/DISTRIBUTOR TAX ISSUES
RE: MEETING ON JUNE 17
______________________________________________________________________________
The Tax Committee will hold a special meeting on June 17, the day before the regular
Tax Committee meeting, to discuss various tax issues affecting funds and their advisers and
distributors that have been raised by IRS on audit. The meeting will begin at 2:00 p.m. in the
David Silver Conference Room on the 12th Floor of the Institute’s offices at 1401 H Street, N.W.,
Washington DC. Lunch will be available beginning at 1:00 p.m.
The "fund" issues for discussion will include the issue addressed in the Institute’s recent
submission regarding the treatment by tax-exempt funds of their compensating balance
arrangements with custodians1 as well as the industry’s experience with the IRS audits. The
"adviser/distributor" issues for discussion will include the treatment by distributors of 12b-1
fees received from funds2 and the treatment by advisers of "start-up" expenses and expense waivers/reimbursements.
Please return by fax (to 202-326-5839) the attached attendance response form if you plan to attend the meeting. If you have any questions regarding
the meeting or wish to suggest agenda items, please call Keith Lawson at 202-326-5832 or Anne Barr at 202-326-5837.
We look forward to seeing you on June 17.
Keith D. Lawson
Associate Counsel - Tax
Attachment
ATTENDANCE RESPONSE FORM
Investment Company Institute Tax Committee Meeting
Tuesday, June 17, 1997
Please fax this portion by Friday, June 13, 1997 to Theresa Brice
Investment Company Institute, 202-326-5839.
YES NO
____ ____ LUNCH
____ ____ TAX COMMITTEE MEETING - 2:00 p.m.
_____________________________________
COMMITTEE MEMBER’S NAME
or _____________________________________ALTERNATE’S NAME
_________________________________________________
COMPANY NAME
* Please check here if you need special services due to a disability.