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Bloomberg Tax: Carried Interest Tax Rules Could Bring Legal Fights for Treasury

August 04, 2020

O’Melveny corporate tax partner Alexander Anderson is quoted in this Bloomberg Tax article discussing the Treasury’s position on a commonly used tax break for hedge fund and private equity managers. The proposed rules would prevent S corporations from utilizing a 2017 tax law provision, which allows corporations to? get the favorable carried interest tax treatment faster by holding assets for one year rather than three, this article reported. The rule reignites a debate over Treasury’s legal authority to exclude S corporations from the meaning of “corporations” in the provision. “Treasury, however, does have arguments on its side,” Anderson said. “Longstanding case law supports the idea that Treasury has broad regulatory authority to interpret the meaning of the tax law, although some judges have pushed more recently for limiting such authority.”

Bloomberg Tax subscribers can read the full article here.