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B-333891 Mar 09, 2022 1 (2022-03-09)

handle is hein.gao/gaomvs0001 and id is 1 raw text is: .GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-333891 March 9, 2022 The Honorable Ron Wyden Chairman The Honorable Mike Crapo Ranking Member Committee on Finance United States Senate The Honorable Richard Neal Chairman The Honorable Kevin Brady Ranking Member Committee on Ways and Means House of Representatives Subject: Department of the Treasury, Internal Revenue Service: Guidance on the Transition from Interbank Offered Rates to Other Reference Rates Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of the Treasury, Internal Revenue Service (IRS) entitled Guidance on the Transition from Interbank Offered Rates to Other Reference Rates (RIN: 1545-B091). We received the rule on January 3, 2022. It was published in the Federal Register as final regulations on January 4, 2022. 87 Fed. Reg. 166. The effective date is March 7, 2022.1 According to IRS, the final rule provides guidance on the tax consequences of the transition away from the use of certain interbank offered rates in debt instruments, derivative contracts, and other contracts. IRS stated that the final rule is necessary to address the possibility that a modification of the terms of a contract to replace such an interbank offered rate with a new reference rate could result in the realization of income, deduction, gain, or loss for federal income tax purposes, or could have other tax consequences. IRS also stated that the final rule will affect parties to contracts that reference certain interbank offered rates. Enclosed is our assessment of IRS's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the 1 Although GAO received this major rule on January 3, 2022, the Congressional Record does not yet reflect receipt. However, according to IRS, the rule was mailed to both the House and the Senate on January 5, 2022. We will update this report as more information becomes available.

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