On Sept. 30, officials from Treasury and the IRS provided an
update on a number of guidance projects relating to international
tax. Speaking at the American Bar Association Section of
Taxation's fall meeting in Boston, the officials discussed
anticipated timing for ongoing and upcoming guidance projects,
including some of those listed in this year's
IRS Priority Guidance Plan. The projects were generally
discussed in two categories – projects anticipated to be
completed by the end of 2016 and projects anticipated to be
completed by the end of 2017.
In 2016, the officials said they anticipated the following
Final regulations under Section 367 (REG-139483-13) addressing
transfers made by U.S. persons of certain property, including
foreign goodwill and going-concern value
Final Section 721(c)
regulations addressing U.S. persons' transfers of certain
property to a partnership that has foreign partners
Final Section 956
regulations addressing treatment as U.S. property of property
held by a controlled foreign corporation in connection with certain
transactions involving partnerships
Section 901(m) regulations addressing
denial of foreign tax credits with respect to foreign income not
subject to U.S. taxation by reason of covered asset
Long awaited Section 987 regulations
addressing branch transactions (as part of a "foreign currency
On the horizon for 2017, the officials said they anticipated the
following guidance projects:
Final Section 7874 regulations
addressing transactions that are structured to avoid the purposes
of Sections 7874 and 367 (so-called
inversion regulations) and new Section 7874 regulations
addressing private placement.
Guidance addressing cloud
transactions (i.e., service v. lease characterization).
Notably absent from the discussion were the
Section 385 regulations addressing related-party lending
transactions. However, on Sept. 30, Treasury sent the Section 385
regulations to the White House Office of Information and Regulatory
Affairs (OIRA) for final review. The OIRA has 90 days to review the
regulations. This review is generally the last step when finalizing
regulations. See OIRA's notice.
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Program Content: Continued efforts to reform state and local tax (SALT) regimes by state legislatures, courts, tax authorities and the Multistate Tax Commission are transforming the way businesses are reporting their income tax obligations to the states. Evidence of those changes includes the shift to market-based sourcing, mandatory unitary combined reporting and other provisions. Businesses are also trying to come up with approaches to handle indirect tax complexity in light of legislation and litigation challenging the Quill physical presence rule. In addition, the recent federal and state elections’ effect on the SALT landscape will come into focus.
On October 5th, 2016, the Internal Revenue Service and Treasury Department published final, temporary and reproposed regulations1 under Sections 707 and 752 of the Internal Revenue Code of 1986, as amended.
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