Monday, October 1, 2007

Senate committee reviews derivatives and hedge funds

The U.S. Senate Finance Committee is examining offshore hedge funds' use of derivatives as a way to avoid withholding taxes on U.S. stock dividends, The Wall Street Journal reported today.

The U.S. Treasury loses more than $1 billion in potential tax revenue each year through this practice, the Journal said. The finance committee review is part of an overall examination of the taxation of hedge funds and is in the preliminary stages.