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

Carson, Lido strengthen RIA networks with bicoastal deals
Carson, Lido strengthen RIA networks with bicoastal deals

Carson is expanding one of its relationships in Florida while Lido Advisors adds an $870 million practice in Silicon Valley.

Goldman gets shareholder backing on $80M executive bonus packages
Goldman gets shareholder backing on $80M executive bonus packages

The approval of the pay proposal, which handsomely compensates its CEO and president, bolsters claims that big payouts are a must in the war to retain leadership.

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a husband-wife tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.