Rep. Moore Issues Statement on Need for Revisions to PFIC Insurance Exception for Financial Guaranty Insurance Companies

Targeted News Service

WASHINGTON, Dec. 18 -- Rep. Gwen Moore, R-Wisconsin, issued the following statement, which was published in the Congressional Record on Dec. 17, entitled "The Need for Revisions to the PFIC Insurance Exception for Financial Guaranty Insurance Companies":

I thank the Speaker and the Chairman of the Ways and Means Committee for working on an end of year bipartisan tax package and helping Congress get on with the business of legislating. While I wish that our colleagues in the Senate would take up Butch Lewis, which the House passed in July, and addresses the multiemployer pension crisis affecting millions of retirees across the country and I wish my colleagues across the aisle would have supported the Ways and Means Committee's advancement of legislation to expand the Earned Income Tax Credit and make the Child Tax Credit fully refundable, it's important for our constituents to see Congress working together.

I also know that many Americans are waiting for Congress to make essential fixes to the tax code in response to the Tax Cuts and Jobs Act and were hoping that Congress would add these fixes to our year-end tax package. While a couple such fixes were made, many vital revisions were left out.

I am planning to introduce bipartisan legislation early next year that will fix an unintended consequence of the recent changes to the insurance business exception to the passive foreign investment company, or PFIC, rules. I urge my colleagues to join me in this effort and cosponsor this upcoming legislation especially Members who are aware of the importance of available and affordable municipal bond financing to state and local municipalities.

This legislation is necessary to preserve the availability and affordability of financial guaranty insurance with respect to municipal bond financing for state and local municipalities. I have worked in close consultation with the staff of the Joint Committee on Taxation in developing this legislation to ensure that it provides a narrow exception for financial guarantors that is specifically designed to address the issue affecting municipal bond insurance in a manner that preserves the closing of a loophole for foreign hedge funds, the intended targets of the recent changes.

As I work with stakeholders and colleagues to finalize this legislation, I understand that the Treasury Department and the Internal Revenue Service are currently working on finalizing regulations with respect to the PFIC insurance business exception. I am particularly encouraged that the Treasury Department and the Internal Revenue Service specifically requested comments with respect to the application of those regulations to financial guaranty insurance. I would encourage the Treasury Department and the Internal Revenue Service to carefully consider the comments received pursuant to their request in light of the pending introduction and consideration of my legislation to address as much as possible any unintended consequences with respect to financial guarantors.