Public Finance and Tax Commentary: May You Live in Interesting Times
2/4/2004
The alleged Chinese curse is currently in full force for Section 529 programs, their state sponsors, program managers and distributors. On the tax law front, efforts to control and streamline federal tax-expenditures have produced a U.S. Treasury proposal which, if enacted, would impact the attractiveness and operations of Section 529 programs. On the securities law front, the mutual fund scandals have prompted the SEC to propose new fee and conflict of interest disclosure rules which are likely to be expensive and difficult to implement.
This Mintz Levin Publication looks at several issues associated with the U.S. Treasury proposal, including:
- Substantial increases in the penalty for use of account distributions for non-qualified purposes
- Age limits on designated beneficiary
- Determination of purpose of distribution shifted back to programs and program managersGrandfatering of existing 529 accounts
- The proposed SEC point of sale and confirmation fee disclosure requirements
- New Confirmation Disclosure Requirements
