you know little things like brokers needing to send out 1099-Div and file with IRS.... i see more blood in the water soon...
Actually, what could be more blood in the water would be if investors decide to take a deduction for the bad debt expense.
From the IRS website:
Quote
In general, if you are liable for a debt that is canceled, forgiven, or discharged, you will receive a Form 1099-C (PDF), Cancellation of Debt, and must include the canceled amount in gross income unless you meet an exclusion or exception.
Assuming it resulted in a large enough tax obligation for Trendon then he ought to be careful of a sneaky paragraph in Section 40304 of the 2013 highway funding bill "Moving Ahead for Progress in the 21st Century Act." Section 40304 of this act would revoke your passport if you have a "seriously delinquent tax debt." In other words, if you owe the IRS $50,000 or more, the Feds can revoke your passport. There's no hearing and no opportunity to contest this decision.
There is also the issue of withholding taxes for interest paid to non US persons. http://www.irs.gov/Businesses/U.S.-Tax-Withholding-on-Payments-to-Foreign-Persons This one can be huge.
