[Federal Register Volume 77, Number 117 (Monday, June 18, 2012)]
[Proposed Rules]
[Page 36228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14788]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-100276-97]
RIN 1545-AU94


Financial Asset Securitization Investment Trusts

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Withdrawal of notice of proposed rulemaking.

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SUMMARY: This document withdraws a notice of proposed rulemaking 
relating to financial asset securitization trusts (FASITs). The FASIT 
provisions (sections 860H through 860L) of the Internal Revenue Code 
(Code) were repealed by Public Law 108-357, effective January 1, 2005, 
with a limited exception for existing FASITs.

FOR FURTHER INFORMATION CONTACT: Julanne Allen at (202) 622-3920 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    Section 1621(a) of the Small Business Job Protection Act of 1996, 
Public Law 104-188 (110 Stat. 1755 (1996)), amended the Code by adding 
part V (sections 860H through 860L) (the FASIT provisions) to 
subchapter M of chapter 1. Part V, which was effective September 1, 
1997, authorized a securitization vehicle called a Financial Asset 
Securitization Investment Trust (FASIT). FASITs were meant to 
facilitate the securitization of debt instruments, such as credit card 
receivables, home equity loans, and auto loans.
    Proposed regulations providing guidance with respect to the 
application of the FASIT provisions were published in the Federal 
Register on February 7, 2000 (65 FR 5807). (Section 1.860E-1(c) of the 
proposed regulations, governing the transfer of non-economic REMIC 
residual interests, was finalized on July 18, 2002, in T.D. 9004.) In 
general, the proposed regulations pertaining to FASITs are proposed to 
be applicable on the date final regulations are filed with the Federal 
Register. The portion of the proposed regulations containing an anti-
abuse rule and the portion of the proposed regulations implementing 
special transition rules for securitization entities in existence on 
August 31, 1997, were proposed to apply on February 4, 2000.
    The FASIT provisions were repealed by section 835(a) of the 
American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418 
(2004)), effective January 1, 2005. During the period of legislative 
consideration of the FASIT provisions and subsequently, other 
structures for loan securitizations were developed. In its discussion 
of the reasons for the repeal of the FASIT provisions, the Ways and 
Means Committee stated:

    The Committee is aware that FASITs are not being used widely in 
the manner envisioned by the Congress and, consequently, the FASIT 
rules have not served the purposes for which they originally were 
intended. Moreover, the Joint Committee staff's report [on its 
investigation of Enron Corporation and related entities] and other 
information indicate that FASITS are particularly prone to abuse and 
likely are being used to facilitate tax avoidance transactions.

H.R. Rep. No. 108-548, Pt. 1, at 295 (2004) (footnote omitted).

    In light of the repeal of the FASIT provisions and their limited 
use, the Treasury Department and the IRS have decided to withdraw the 
proposed regulations.

Drafting Information

    The principal authors of this withdrawal notice are Richard LaFalce 
and Julanne Allen of the Office of the Associate Chief Counsel 
(Financial Institutions and Products).

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirement.

Withdrawal of Notice of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, the notice of 
proposed rulemaking (REG-100276-97) published in the Federal Register 
on February 7, 2000 (65 FR 5807) is withdrawn.

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-14788 Filed 6-15-12; 8:45 am]
BILLING CODE 4830-01-P