Fee Waiver Guidance Likely to Come Out Soon, IRS Attorney Says

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April 29 — A senior Internal Revenue Service attorney told tax practitioners that proposed regulations addressing fee waivers are largely complete and would likely be released “in a matter of months.”

Clifford M. Warren, special counsel to the IRS associate chief counsel (Passthroughs & Special Industries), said April 29 that resolution of the fee waiver issue has been a top priority for the IRS for some time and the agency is now close to completing the project. The regulatory project is expected under tax code Section 707(a)(8) and will address disguised fees and management fee waivers.

The fee waiver regulatory project has attracted interest in the taxpayer community as fund managers, particularly in the private equity arena, attempt to shift earnings from fees to carried interest.