November 26, 2012
Fleisher: “Why a Tax Crackdown Is Not Needed on Mortgage-Backed Securities”
In Why a Tax Crackdown Is Not Needed on Mortgage-Backed Securities, Professor Vic Fleisher argues that IRS enforcement of tax laws governing REMICs will merely complicate efforts to properly fix blame and allocate the costs of the financial crisis. Professor Fleisher relies upon poorly-defined policy reasons for his position. Nonetheless, the severity of disregard for the rules, a need to ensure that the mortgage-securitization industry honestly reform, and the potential additional revenue warrant IRS action with respect to REMICs. For additional discussion regarding the need for IRS and other enforcement in this industry see Bradley T. Borden & David J. Reiss, Wall Street Rules Applied to REMIC Classification; Bradley T. Borden, Did the IRS Cause the Financial Crisis; Bradley T. Borden & David J. Reiss, An Uneasy Justification for Prosecutorial Abdication in the Subprime Industry; Naked Capitalist, Yes, Virginia, The IRS does not Treat the Connected Like the Rest of Us (REMIC Edition).
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