Treasury Reg Revision Helps Sovereign-Wealth Investors in US (3)

The Treasury Department and the IRS moved Friday to address concerns that sovereign-wealth funds and other foreign-government investors in the US could be penalized by new regulations on when their US investment income is exempt from US taxation.

The agencies proposed new rules (CC-00349656-26; RIN 1545-BR10) that would “grandfather in” existing investments so that they won’t be subject to aspects of foreign-government income regulations under tax code Section 892 that were proposed in December.

Legal and business groups such as the New York State Bar Association’s tax section had concerns that the new regulations could be applied retroactively ...