Tax Accounting for Notional Principal Contracts with Contingent Nonperiodic Payments: A Look at the IRS and the New York State Bar Association Proposals
Author: Frank R. Strong.
Source: Volume 20, Number 02, Winter 2003 , pp.122-127(6)
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Abstract:
The IRS and Treasury are preparing to issue significant guidance relating to notional principal contracts that provide for one or more nonperiodic payments that are contingent in nature. This is an area that historically has been ambiguously governed by general common law principles and the government’s initial foray into notional principal contracts in Notice 89-21.1 This column provides a brief overview of the recent analysis produced by the government and tax practitioners in anticipation of this rulemaking effort, and offers a couple of observations that the IRS and Treasury may want to consider as they work toward the promulgation of rules in this area.Keywords: Notice 2001-44
Affiliations:
1: Shearman & Sterling.