Always wrong, never in doubt. IRS Struggles With REMIC Relief


Always wrong, never in doubt.

The problem is not whether REMIC trusts, trustees, and beneficiaries should be given extensions on reporting and other relief on the cash flow generated or delayed through REMICs.

The problem is that there is no cash flow through REMIC trusts. There is no real estate. There is no mortgage. There is no investment. And nothing flows through the REMIC as a conduit. The beneficiaries are not investors who bought certificates. The underwriters and beneficiaries are both the same entity: the investment bank bookrunner. And the named “trustee” neither knows nor manages any assets.

So much for Real Estate Mortgage Investment Conduit.

There is nothing to extend except the illusion that these REMICS exist. There is no relief because there is nothing to tax — except for the unreported revenue of the investment bank.


3 Responses

  1. I looked at the Article posted by Neil – it is written by tax and securities lawyers from Morgan Lewis who claim to be very experienced in taxation of REMIC Trusts….

    Did they actually examined ANY assets in any REMIC Trust or rely on Black Knight’s MSP information like everyone else in the Chain of Fraud?

  2. I am curious is here are ANY valid REMIC Trusts who ever reported any profits

    A real estate mortgage investment conduit (REMIC) may be organized as a partnership, a trust, a corporation, or an association and is exempt from federal taxes.

    Ok, first thing first – it MUST be organized in STATES where they conduct business to pay STATES taxes.

    REMIC are exempt from Federal taxes (another hook to keep investors defrauded)

    But they are not exempt from State taxation. And REMICs are not non-profits who in fact are also required to file tax reports.

    So, where I can find ANY tax reports for ANY REMIC Trusts?

  3. IRS fails to distinguish valid REMICs from invalid REMICs. I believe Neil is talking about invalid REMICs (i.e. financial crisis private label REMICs) — that were put together, but simply not compliant. If not compliant by SEC own rules and regulations, how can the IRS still make them valid? Let’s dot the i’s here.

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