IRS eyes firms' derivative use

The IRS is seeking information from Citigroup and Lehman Brothers, The Wall Street Journal said.
JUL 19, 2007
By  Bloomberg
The Internal Revenue Service is seeking information from Citigroup and Lehman Brothers, The Wall Street Journal said. The New York-based firms have received information document requests on offshore investors’ use of derivatives in order to dodge taxes on U.S. stock dividends, sources told the Journal. The major concern is the derivatives trades in which securities firms purchase stocks from hedge fund clients and then pay them returns and dividends, the Journal said. Participating hedge funds save on taxes because technically they aren’t holding the stock. In its investigation, the IRS is looking into the reasons for these trades: Were they made for economic reasons or to evade taxes? Firms using these trades have sidestepped more than $1 billion in withheld taxes, cash that is now at stake during the IRS’ probe, accountants told the Journal.

Latest News

Mercer Advisors lands third-biggest deal to date with Full Sail Capital
Mercer Advisors lands third-biggest deal to date with Full Sail Capital

With over 600 clients, the $71 billion RIA acquirer's latest partner marks its second transaction in Oklahoma.

Fintech bytes: FP Alpha rolls out estate insights feature
Fintech bytes: FP Alpha rolls out estate insights feature

Also, wealth.com enters Commonwealth's tech stack, while Tifin@work deepens an expanded partnership.

Morgan Stanley, Atria job cut details emerge
Morgan Stanley, Atria job cut details emerge

Back office workers and support staff are particularly vulnerable when big broker-dealers lay off staff.

Envestnet taps Atria alum Sean Meighan to sharpen RIA focus
Envestnet taps Atria alum Sean Meighan to sharpen RIA focus

The fintech giant is doubling down on its strategy to reach independent advisors through a newly created leadership role.

LPL, Evercore welcome West Coast breakaways
LPL, Evercore welcome West Coast breakaways

The two firms are strengthening their presence in California with advisor teams from RBC and Silicon Valley Bank.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.