The House tax reform blueprint is on schedule for release later this month and will cover international, business and individual tax reform, according to press reports quoting Ways and Means Committee members. The blueprint may also contain certain measures proposed by House members during various member day hearings that took place earlier this year. The blueprint, which will become part of House Speaker Paul Ryan's (R-WI) policy agenda, is not expected to contain legislative language.

Treasury Assistant Secretary for Tax Policy Mark Mazur said this week the Administration has not received any public comments that would delay finalization of the proposed Section 385 debt/equity regulations. The Administration earlier indicated it wants to finalize the proposed rules this year, perhaps as early as Labor Day.

The Treasury official was quoted as saying the Administration is continuing to sift through the comments it has received and is taking those comments into consideration as it finalizes the regulations. He disclosed that a number of industries, including regulated industries, are seeking carve-outs based on the argument that they have not been abusive in terms of debt/equity.

Treasury is also continuing to work on addressing the US country-by-country (CbC) "gap year" issue through optional CbC reporting for 2016, but the mechanism will not be included in the final regulations. Bob Stack, Treasury Deputy Assistant Secretary (International Tax Affairs), was quoted this week as saying that while the IRS will accept voluntary filings for 2016, it is not clear which countries will accept the voluntary filings as "required" in order to fulfill foreign law requirements. The official added that the Administration is working with the OECD to get countries to accept US voluntary filings and that some have already agreed to do so. The problem is that if the country of residence of the ultimate parent does not require CbC reporting, countries in which subsidiaries of the multinational operate may impose a "secondary reporting" requirement. This could result in local filing in that foreign jurisdiction or designating a surrogate foreign entity to file on behalf of the multinational.

Finally, an IRS official this week said the government will soon release temporary and proposed regulations that will implement Notice 2015-10. That notice announced changes to rules for claiming refunds and credits for certain withholding taxes.

The new regulations will amend regulations applicable to refund and credit claims for amounts withheld on payments to foreign persons under Sections 1441 through 1443 (Chapter 3 or NRA withholding) and on payments to foreign financial institutions (FFI) and certain nonfinancial foreign entities (NFFE) under Sections 1471 and 1472 (Chapter 4 or Foreign Account Tax Compliance Act (FATCA) withholding).

The new regulations will provide that any claim for refund or credit made by the beneficial owner of a withheld payment will be available only to the extent that the relevant withholding agent deposited the amount withheld, and such amount is in excess of the claimant's tax liability. The regulations will also provide for a pro rata allocation of the amount available to the claimant for refund or credit when a withholding agent has only partially satisfied its deposit requirements.

On 31 May, the OECD released a discussion draft requesting input on the multilateral instrument to be developed under OECD BEPS Action 15. The multilateral instrument's main objective is to implement the tax treaty related BEPS measures by modifying existing bilateral tax treaties in a consistent and efficient manner. The instrument will include OECD BEPS recommendations on hybrids, treaty abuse, permanent establishments and dispute resolution. Comments are invited on certain technical issues and questions related to the implementation of the treaty-related BEPS measures (though not on the scope or substance of the BEPS outputs), as well as on the development of a provision on mandatory binding arbitration within the mutual agreement procedure. Comments should be submitted by 30 June, and a public consultation is scheduled for 7 July.