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Big Brother Expands Reach

Klotz on Bonds

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<h3>James A. Klotz</h3>

James A. Klotz

There’s not much Congress does without a lot of fanfare. It did, however, manage to slip in a surprise for some municipal bond investors.

Back in May, Congress quietly passed a law that expands the tax-free income reporting requirements for individuals as well as financial institutions.

For the first time, financial institutions, such as banks and broker/dealers, will be required to furnish the IRS with municipal bondholders’ information with respect to payments of tax-exempt interest in 2006, as well as the portion of interest paid on private activity bonds subject to the Alternative Minimum Tax (AMT).

The standard 1099 INT form will be amended to include these categories.

James A. Klotz is the President of FMSbonds, Inc.
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Oct 27, 2006

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