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    Subject Term: "Financial derivatives"

    1 publication with a total of 1 open recommendation
    Director: Mctigue, James R Jr
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: To better ensure that economically similar outcomes are taxed similarly and minimize opportunities for abuse, the Secretary of the Treasury should undertake a study that compares the current approach to alternative approaches for the taxation of financial derivatives. To determine if changes would be beneficial, such a study should weigh the tradeoffs to IRS and taxpayers that each alternative presents, including simplicity, administrability, and economic efficiency.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury disagreed with this recommendation based on the fact that many outside studies already exist and IRS did not comment. While Treasury disagreed with the recommendation, debate on tax reform, both in Congress and within IRS, continues and actions to ensure that economically similar outcomes are taxed similarly seem likely. GAO continues to maintain that further study is needed in coordination with IRS. If financial derivatives are included in tax reform, this could lead to savings for the federal government. GAO will continue to monitor progress on tax reform and whether it includes changes to the taxation of financial derivatives consistent with the recommendation.