June 2009 - The Tax Adviser

Treasury issued several notices as part of the government’s response to the economic crisis. The notices allow relief from Sec. 382 for loss corporations acquired under TARP. They also provide relief for obligations and other securities issued by Fannie Mae and Freddie Mac in the recent bailout.

To provide a roadmap for these students and their tax advisers, this article describes the more prevalent loan forgiveness and loan repayment programs, along with the associated tax consequences.

To avoid the imposition of a penalty for an understatement related to an undisclosed position, a practioner must meet the substantial authority standard with respect to the position.