What have I been writing about for ..... a couple of years now?
(Reuters) - The Internal Revenue Service has launched a review of the tax-exempt status of a widely-held form of mortgage-backed securities called REMICs.
The IRS confirmed to Reuters that the review comes in response to mounting evidence that banks violated tax requirements by mishandling the transfer of mortgages to REMICs, short for Real Estate Mortgage Conduits.
You mean, for instance, like evidence that the trust never actually got the so-called loans (until, in some cases, they wanted to foreclose on them of course)?
Oh, and the penalty, as I've noted?
But if the IRS concludes that the REMIC investments failed to comply with strict requirements in the federal tax code, the REMIC would have to pay a 100 percent tax on the income from those investments.
That means that the IRS could confiscate the full amount. Tax law experts said the REMICs also could be subjected to additional penalties for failing to file tax returns on the income.
Hold on to your seats on this one folks....
Incidentally, this was one of my 2011 predictions.....
"Someone" will pry open the REMICs in MBS-land for at least private-label deals and fun will ensue. Don't be long big banks when it happens. The wheels of justice turn slowly, but they do turn and I believe 2011 will be the year when the logjam breaks. This, incidentally, is the one prediction that in my opinion is the highest-risk - the banks know this bomb is ticking and will try to defuse it through some sort of backdoor deal. I don't think they'll get it done - the lawyers smell blood and there's too much money to be made taking bites out of some very fat cats. If I'm right there will be at least one burnt offering made - probably BAC - and, if it comes at the wrong time, it won't stop there. If this gets going in the middle of a broad market sell-off Lehman will look like a cake walk.
Heh heh heh..... I wonder if the fine folks over at the IRS read The Ticker, or if this is simply a manifestation that despite knowing all about this for years they've been run by bankster stooges (like Geithner) and, up until they got backed up against a wall on revenues, they were willing to overlook the little formalities that conferred tax passthrough status......
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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