Earnings Stripping

TEI Submits Comments to the IRS in Response to Notice 2017-36 on the Final Documentation Regulations Under Section 385

In August 2017, a diverse working group comprising members of the Federal Tax Committee, U.S. International Committee, and Tax Reform Task Force reconvened to produce responsive comments to Notice 2017-36, One-Year Delay in the Application of § 1.385-2, on the final debt documentation regulations under section 385.

TEI Submits Comments to the IRS in Response to Notice 2017-38 on the Final and Temporary Section 385 Regulations

In July 2017, a diverse working group comprising members of the Federal Tax Committee, U.S. International Committee, and Tax Reform Task Force coalesced to produce responsive comments to Notice 2017-38, Implementation of Executive Order 13789 (Identifying and Reducing Tax Regulatory Burdens), on the final and temporary regulations under section 385.

TEI Comments on § 385 Proposed Regulations Allowing IRS to Recharacterize Related-Party Debt to Equity

On July 6, 2016, TEI submitted comments to the Internal Revenue Service regarding its proposed regulations for 26 U.S.C. § 385, which would give the IRS broad authority to recharacterize related-party debt to equity. We submitted these comments pursuant to the REG-108060-15 notice of proposed rulemaking. The comments discuss the negative macroeconomic effects the proposed regulations could have, the technical tax complexities they would create for corporate taxpayers, and suggested changes Treasury and IRS should make to the proposed regulations before finalizing them.

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