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Abstract: 

The Foreign Account Tax Compliance Act (FATCA) is by any measure one of the most significant tax issues for financial instititutions in recent years. Ian M. Comisky and Matthew D. Lee provide a comprehensive overview of FATCA in light of the final regulations promulgated earlier this year and the looming implementation deadlines. FATCA’s reporting obligations are in addition to those required under the Report of Foreign Bank and Financial Accounts, more commonly known as the FBAR form. In our second article, Melinda Fellner Bramwit reviews the Internal Revenue Service’s offshore voluntary disclosure programs that impact foreign taxpayers including financial institutions. Next, Russell J. Pinilis covers the foundational and often controversial tax issue involving private investment funds, namely, the taxation of carried interests. Mr. Pinilis explains the basic economics and transactional structure of carried interests and their taxation under federal law. Jonathan Sablone, Troy K. Lieberman, and Christopher E. Queenin, in this issue’s fourth article, examine continued litigation fallout from the 2008 financial crisis in the form of bond insurers that are suing banks and other financial institutions involved in mortgage securitzation. Although the insurers, as sophisticated parties in these transactions, face hurdles in convincing the courts that that they are victims, they have achieved some significant legal victories. For credit card issuers, and some card users, there can be a number of tax concerns. These are addressed by Joseph Mandarino in our next article. Mr. Mandarino first provides background on the primary aspects of credit card agreements and then discusses the taxation of different aspects of credit card transactions, including interchange revenue received by card issuers. Last, the issue closes with Ali Salameh’s primer on the Federal Deposit Insurance Corporation’s role as a receiver of failed banks and surrounding litigation issues—a topic of importance as the statute of limitations for making a claim against the numerous institutions that failed in 2009 and 2010 approaches. Unique issues can arise in FDIC litigation such as proper jurisdiction, automatic stay, removal to federal court, and tolling of the statute.

Keywords: Foreign Account Tax Compliance Act; offshore voluntary disclosure; FBAR; carried interest; private equity; residential mortgage-backed securities; receivership; FDIC litigation/claims

Affiliations:  1: New York Law School.