SIA Submits Comments to the IRS on a Proposal Regarding Safe Harbor Under Section 475

The Securities Industry Association (SIA)* provides comments to the Internal Revenue Service (IRS) on the Advance Notice of Proposed Rulemaking: Safe Harbor for Satisfying Statutory Requirements for Validation under Section 475 for Certain Securities and Commodities (the Notice). The Notice proposes a framework for developing an elective safe harbor to determine the fair market values of securities held by dealers therein for purposes of section 475 of the Internal Revenue Code. SIA believes that a safe harbor based on book-tax conformity and the principles outlined in the Noticeare the best means of establishing a streamlined, effective and accurate process for auditing compliance with section 475. SIA urges the IRS to consider making the safe-harbor available to taxpayers retroactively.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.