Latest News Tagged With “TEFRA”

IRS Withdraws Proposed TEFRA Rule

Nov 14, 2011

Earlier this month,  the IRS finally withdrew its proposed rule relating to the TEFRA disallowance. The rule, which dates back to August 2006, would have forced Subchapter S banks to apply the 20% TEFRA disallowance not just for the first three years after the bank’s S election, but every year thereafter in which it had interest expense attributable to certain tax-exempt municipal securities. Withdrawal of the proposed rule represents the final chapter in what became a hotly-contested dispute between the Sub S bank community and the IRS—one that ultimately went as far as the U.S. Seventh Circuit Court of Appeals in Chicago.  Read more