Regulated Investment Companies
Regulated investment companies (RICs) operate in a complex environment where precision, transparency and timeliness are essential. At Withum, our Financial Services Team brings comprehensive industry expertise and proactive guidance to help you meet these complex reporting obligations with confidence.
Industry Trends and Challenges
- Excise Tax Compliance - RICs face challenges with excise tax compliance due to complex timing rules, calendar-year calculations and the need for precise income and distribution data.
- Interval Funds and Alternative Structures - Interval funds and alternative structures, like non-traded REITs or BDCs, present unique tax challenges for RICs. That includes challenges surroundingincome qualification, asset diversification and distribution requirements. These vehicles often hold illiquid or complex assets, making compliance with Subchapter M more difficult.
- Stock Repurchase Excise Tax - While most RICs are exempt from the 1% stock repurchase excise tax, they must still maintain proper documentation to prove eligibility — especially if their RIC status changes.
- Changing Tax Policies - The One Big Beautiful Bill Act (OBBBA) introduces significant tax reforms that impact Regulated Investment Companies (RICs). Our team can assist in navigating these updates by:
- Analyzing eligibility for the new deduction.
- Modeling tax impacts on fund performance and investor returns.
- Advising on structuring opportunities to optimize tax efficiency under the new law.
Our team of experts will help navigate these complexities, ensure accurate tax treatment and support all necessary filings to maintain RIC status and avoid penalties.
Regulated Investment Companies Services
Audit
- Compliant reporting and other regulatory reporting (in accordance with auditing standards generally accepted in the United States or International accounting standards).
- Audit of financial statements, including review of annual filings with the SEC.
- Audit the quarterly holdings of investments, in accordance with Rules 17f-1 and 17f-2.
- Performance attestations.
- Review of semi-annual reporting to shareholders.
- Review post-effective amendments to registration statements and proxy filings.
- Internal control reviews.
Tax
- Compliance with Subchapter M of the Internal Revenue Code.
- Preparation of excise tax returns.
- Preparation of federal and state tax returns (including K-1 reporting).
- Preparation of federal and state tax returns for the general partner and investment advisor.
- Review of required dividend distribution calculations.
- Preparation of partner allocations.
- Provide proactive ongoing advice on tax issues specific to investment companies.
- Assistance with IRS and State tax audits.
Contact Us
For more information or to discuss your business needs, please connect with a member of our team.
