Source: http://mastertype.blogspot.com/2011/07/temporary-regs-revise-regs-to-conform.html
Timestamp: 2017-08-22 01:47:31
Document Index: 91892182

Matched Legal Cases: ['§1', '§1', '§1', '§1', '§1', '§1', '§1', '§48']

Accounting and Tax Tips: Temporary Regs Revise Regs To Conform To Dodd-Frank Act
Temporary Regs Revise Regs To Conform To Dodd-Frank Act
T.D. 9533, 07/012011, Preamble to Prop Reg 07/012011
IRS has issued temporary and proposed regs that make changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act, P.L. 111-203), which requires Federal agencies to remove any reference to, or requirement of reliance on, credit ratings from their regs and to substitute such standard of creditworthiness as the agency deems appropriate for these regs. In general, the changes are effective July 6, 2011.
Background. Section 939A(a) of the Dodd-Frank Act requires each Federal agency to review its regulations that require the use of an assessment of creditworthiness of a security or money market instrument, and to review any references or requirements in those regulations regarding credit ratings. Each agency must modify any regulation identified in the review by removing any reference to, or requirement of reliance on, credit ratings and substituting a standard of creditworthiness that the agency deems appropriate.
New temp regs. To satisfy this Dodd-Frank requirement, IRS has issued temp and proposed regs that make the necessary changes to the following regs:
In Reg. §1.150-1, relating to definitions and special rules, they replace references to rating agency fees with “fees paid to an organization to evaluate the credit quality of the issue.”
In example (2) in Reg. §1.171-1, dealing with amortizable bond premiums, “credit rating” is changed to “credit quality.”
In Reg. §1.197-2(b)(7), relating to amortization of goodwill and certain other intangibles, they remove “the existence of a favorable credit rating.”
In Reg. §1.249-1, relating to the limitation on deduction of bond premium on repurchase, they replace “credit rating” and “ratings of credit services” with “credit quality” and “widely published financial information.”
In Reg. §1.475(a)-4(d)(4), relating to market to market accounting for securities dealers, examples (1)-(3) are revised to remove references to credit ratings or credit rating agencies.
In Reg. §1.860G-2, dealing with real estate mortgage investment conduits (REMICs), the rating agency alternative standard is removed.
In Reg. §1.1001-3, relating to modification of debt instruments, “rating” and “credit rating” are replaced with “credit quality.” Several examples also are revised.
In Reg. §48.4101-1(f)(4), which relates to registration of certain persons for purposes of several fuel tax provisions, and the need for them to have adequate financial resources, the examples of the types of documents IRS should review are removed. Instead, IRS is to look at all information relevant to the applicant's financial status.
Posted by Kenneth Reid at 7/07/2011 01:20:00 PM