TEI Urges Clarification Of Interest Netting Rules.

Explaining that a revenue procedure issued last year narrowly construes the interest netting statute and undermines Congress's intent to provide equitable relief, Tax Executives Institute recently urged the Senate Finance Committee to clarify the new statute.

In a June 2, 2000, letter to Chairman William V. Roth, Jr., TEI President Charles W. Shewbridge, III explained that "the enactment of section 6621(d) signalled Congress's desire to return fairness and equity to the Code's rules on charging for the use of funds." Regrettably, Mr. Shewbridge stated, Rev. Proc. 99-19 interprets the new statute quite narrowly. Specifically, the procedure provides that interest netting is not available in respect of any period during which interest was not "allowable" or "payable" by law; an example of this disallowance is the 45-day interest-free period the government has...