Bloomberg Tax Introduces New Portfolio To Address New IRS Withholding Requirement

Arlington, Va. — Bloomberg Tax today announced the release of a new Tax Management Portfolio, Section 871(m) and Gross Basis U.S. Taxation of Derivative Exposure to U.S. Equities. Authored by a team of practitioners at Ernst & Young that included Lauren Lovelace, Janine Burman-Gage, Matthew A. Stevens, Tara Ferris, Jonathan Jackel, and Sean P. Conroy, the Portfolio discusses the circumstances under which equity-based derivative products and financial instruments are taxed under Section 871(m).

This Portfolio addresses the scope of financial products covered under Section 871(m), and outlines when and how dividend equivalents are subject to withholding, who is responsible for making the determination, what exceptions may apply, and who is responsible for any required withholding. It also includes a thorough review of Section 871(m)’s legislative history and evolving regulatory guidance.

“There is a great deal of nuance around the new IRS withholding requirement, Section 871(m),” said Jean McCormick, vice president of analysis & content, Bloomberg Tax. “This Portfolio helps practitioners navigate the many regulations laid out by the Treasury Department and the IRS over the past decade related to its application. It also serves as a valuable resource in providing a practical explanation of the impact of the applicable guidance on taxpayers and withholding agents.”

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