Wednesday, October 24, 2007

REMICs Remix

Marie's blog post below is timely because another issue involving REMICs is currently hot in the tax world.

In February of this year, the Service issued a notice (2007-17) that described a pilot program aimed at increasing the amount of guidance provided by the Service:

"Under this pilot program, the IRS and Treasury would publish a notice for each guidance project selected for the program. The notice would identify research, background documents, drafts of proposed guidance and other work products, and ask interested parties to provide them. These written submissions from the public will help the IRS and Treasury determine whether it is appropriate to publish guidance. If so, the IRS and Treasury expect that increased public participation in the preliminary stages of certain guidance development would provide a significant benefit to taxpayers by permitting IRS and Treasury to hasten the publication of a greater number of guidance projects."

The first such notice was a request for guidance in the REMIC area (specifically, consideration of expanding the type of modifications on loans that a REMIC can make).

Some commentators have decried this program, stating that the wolves will be guarding the henhouse. While these are valid concerns, I believe the program is a good one. The Service is merely inviting proposals for drafting the regulations. It is not required to accept them. Outside groups have always influenced the development of regulations, this program appears to be just switching who gets to write the first draft.

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