The Structured Finance Industry Group ("SFIG") submitted comments to the Internal Revenue Service ("IRS") regarding the application of section 1446(f) of the Internal Revenue Code to middle-market collateralized loan obligations ("MM CLOs") and other securitizations.
Section 1446(f) potentially requires the purchaser of equity interests in an entity that is treated as a partnership for U.S. federal income tax purposes to withhold on a seller that does not provide the purchaser with an IRS Form W-9 or another "nonforeign affidavit." Certain MM CLOs and other securitizations are treated as partnerships for U.S. federal income tax purposes.
In the letter, SFIG requested guidance on the application of this new withholding requirement to holders of equity interests that are traded through a U.S. financial institution, such as the Depository Trust Company.
Cadwalader tax attorneys Jason Schwartz and Gary Silverstein assisted in drafting the letter.
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