Financial Executives Institute joins a broad-based group of trade and business organizations backing a moratorium on the Dept. of Treasury's Notice 98-35 dealing with the tax treatment of "hybrid branch transactions" of U.S. multinational corporations. Legislation introduced today by Sens. Connie Mack (R-Fla.) and John Breaux (D-La.) and Reps. Phil Crane (R-Ill.) and Bob Matsui (D-Calif.) would permanently rescind the Treasury Department's authority to finalize any proposed regulations under Notice 98-35 or under subpart F of the Internal Revenue Code dealing with hybrid transactions. It would also require the department to study the tax treatment of hybrid transactions and provide a written report to Congress. FEI applauds Sens. Mack and Breaux and Reps. Crane and Matsui in this bipartisan, bicameral effort to keep the Treasury Dept. and the IRS from "legislating through regulation."
FEI maintains that it is the prerogative of Congress alone to adopt new laws into the tax code, and that the Treasury Department is attempting to usurp the legislative process. Notice 98-35 will undermine the ability of U.S. corporations with overseas operations to compete globally. It penalizes U.S. multinationals for employing tax planning strategies that reduce foreign income tax, while foreign competitors will be free to continue to employ such strategies.
Financial Executives Institute, the leading advocate for the views of corporate financial management, is a professional association of 14,000 senior financial executives from 8,000 U.S. and Canadian companies.
SOURCE: Financial Executives Institute
Contact: John Porter of Financial Executives Institute, 202-457-6206 or
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