FROM THE OFFICE OF PUBLIC AFFAIRS
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August 24, 2004
JS-1872
Treasury and IRS Issue Guidance on Accrual of Remic Income
The IRS and Treasury Department today announced proposed regulations concerning accrual of interest income by the holder of a regular interest in a Real Estate Mortgage Investment Conduit (REMIC).
The proposed regulations respond to industry concerns resulting from investor confusion about the appropriateness of the current practice, which generally reports too little income to the first holder of a REMIC regular interest. REMIC sponsors and servicers have expressed concern that current practice creates economic distortions.
"The method in the proposed regulations better reflects the underlying economics of the transaction than does the current practice it would replace ," said Greg Jenner, Acting Assistant Treasury Secretary for Tax Policy. "It represents sound tax policy and also addresses industry concerns about distortion."
The proposed regulations were filed today with the Federal Register and will be published August 25, 2004.
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