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IRS Offers Help on Mutual Fund Expenses

Please note: This item is from our archives and was published in 2000. It is provided for historical reference. The content may be out of date and links may no longer function.

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Mutual fund distributors can benefit from the new IRS guidance on how to account for commissions paid on sales of mutual fund B shares.

Revenue procedure 2000-38, which became effective October 2, outlines three methods—the distribution fee period, the five-year and the useful life. All three allow the distributor to capitalize the commissions paid.
Larry Langdon, commissioner of the IRS Large and Mid-Size Business Division, said the revenue procedure is an example of how the division is focusing on working with taxpayers to resolve issues in a quicker, fairer manner.

Distributors who wish to change to one of the three accounting methods must obtain the IRS commissioner’s consent by following the procedures outlined in the new guidance.

The text of the revenue procedure is available on the IRS Web site, www.irs.gov .