On June 30, 2016, the Internal Revenue Service (IRS) issued Chief Counsel Notice 2016-009, which can be found here. In the notice, the IRS updated the list of issues that require IRS National Office review (the List). The List indicates those issues or matters raised by IRS field examiners that must be coordinated with the appropriate IRS Associate office.
There are several new items on the List. Notably, corporate formations with repatriation transactions, certain spin-off transactions and transactions that may implicate Treasury Regulation § 1.701-2 partnership anti-abuse rules are now also included. Debt-equity issues pursuant to Section 385 continue to be on the List.
In addition, now included are issues designated for litigation and issues that for technical tax reasons will not be referred to the IRS Office of Appeals under Revenue Procedure 2016-22, Section 3.03 (also relating to issues designated for litigation). We discussed Revenue Procedure 2016-22 in a recent posting.
Issues on the US Department of Treasury's Priority Guidance Plan (PGP) continue to be included on the List. The current PGP includes guidance relating to:
- Captive insurance arrangements
- "Basket option contracts"
- Section 954, including regarding foreign base company sales and services income
- Section 954(c), including foreign currency gains
- Section 956, regarding issues relating to the treatment of loans to foreign partnerships and upfront payments of swaps
- Section 367 generally
- Section 367(d) regarding transfers of intangible property to foreign corporations and partnerships
- Section 482, including with respect to the treatment and allocation of risk
It remains to be seen how proposed regulations, recent taxpayer friendly court decisions, and recent Large Business and International (LB&I) International Practice Units will impact issues raised by the IRS. See our previous postings:
- IRS Issues IPU on Corporate Inversions
- IRS Publishes Another IPU on Transfer Pricing
- IRS Release IPU Materials on Transfer Pricing
- IRS Releases Practice Unit on Allocation of Interest Expense
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.