(Bloomberg) — Hedge fund managers including billionaire JohnPaulson won't immediately face new limits on their use of insurancein offshore tax havens, after the IRS proposed rules and chose notto make them effective now.

The Internal Revenue Service rules, released on Thursday, willtake effect only after the agency takes comments and considers howseveral important terms will be defined.

The U.S. Treasury Department said in an Aug. 9 letter tothen-Senate Finance Committee Chairman Ron Wyden that it wasconcerned about a "loophole" that allows hedge fund managers tolimit their personal income tax bills by routing investmentsthrough insurance companies in low-tax jurisdictions.

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