On September 2, 2011, the IRS and Treasury released the annual Priority Guidance Plan for 2011-2012 (the “Plan”), which contains 317 projects that are priorities for both agencies during the plan year (July 2011 through June 2012).15 The Plan is broken down into various areas of the Internal Revenue Code, including consolidated returns, corporations and their shareholders, tax-exempt bonds and international issues. The Plan includes, among others, the following capital markets related projects:

  1. Revenue ruling on the treatment of an interest in a money market fund as a cash item for regulated investment company (i.e., mutual funds and closed-end funds) asset test purposes (section 856(c)(4)(A));
  2. Final regulations amending the definitional section of the straddle rules (section 1092(d));
  3. Guidance addressing the character and timing of hedge gains and losses for hedges of guaranteed living benefits and death benefits provided with regard to variable annuities;
  4. Notice to determine how to compute the accruals of original issue discount on pools of revolving cardholder debt held by credit card issuers;
  5. Final regulations for determining when a debt instrument is publicly traded (section 1273);
  6. Regulations amending the inflationindexed debt instruments issued at a premium regulations (section 1.1275-7);
  7. Regulations to address basis reporting for options and debt instruments (section 6045);
  8. Regulations on prepaid forward contracts;
  9. Regulations relating to accruals of interest (including discount) on distressed debt; and
  10. Regulations that remove any reference to, or requirement of reliance on, “credit ratings” in regulations under the Internal Revenue Code pursuant to Dodd-Frank.