Income of Foreign Governments and of International Organizations

The Section of Taxation of the American Bar Association submitted comments regarding proposed and final regulations under Section 892 of the Internal Revenue Code. They support the regulations but recommend specific revisions to the qualified partnership interest exception, the expansion of debt acquisition safe harbors, and the inclusion of a safe harbor for local policy activities to provide greater certainty for foreign sovereign investors.

The Securities Industry and Financial Markets Association (SIFMA) argues that the proposed regulations should include formal guidance ensuring no retroactive impact on existing investments and a prospective grandfathering period. They also advocate for reversing the presumption that debt acquisitions are commercial activities, suggesting instead that they should be presumed to be investments unless they meet specific standards.