IRS Internal Memorandum Concludes Offshore Fund Engaged in Lending and Underwriting Business in the United States
Client Memorandum

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On January 2, the Internal Revenue Service (the “IRS”) released a Chief Counsel Advice memorandum (the “CCA”) that concludes that an offshore master fund and its offshore feeder fund were engaged in a trade or business in the United States as a consequence of the master fund’s lending and stock distribution activities, which were conducted on behalf of the master fund by a fund manager based in the United States. Although the CCA does not constitute authority on which a taxpayer may rely, it does provide insight into the views of the IRS on these issues.

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