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July 26, 2017
2017-1241

IRS delays Section 385 documentation requirements by one year

In Notice 2017-36 (attached), the IRS delayed application of the documentation regulations under the Section 385 regulations (T.D. 9790) by 12 months. (For discussion of the regulations, see Tax Alert 2016-2036.)

"In response to the concern that taxpayers have continued to raise with the application of the [documentation regulations] to interests issued on or after January 1, 2018, and in light of further actions concerning the final and temporary regulations under [Section] 385 in connection with the review of those regulations, the Treasury Department and the IRS have determined that these concerns warrant a delay in the application of the [documentation regulations] by 12 months," the Notice stated. "Accordingly, the Treasury Department and the IRS intend to amend the [documentation regulations] to apply only to interests issued or deemed issued on or after January 1, 2019."

The Notice also requested comments by Friday, September 1, 2017, concerning whether the proposed amendment and delay afford adequate time for taxpayers to develop any necessary systems or processes to comply with the documentation regulations.

The IRS noted that Section 385 regulations under were identified in Notice 2017-38 as among significant tax regulations that are unduly burdensome or complex and require additional review. (For discussion of Notice 2017-38, see Tax Alerts 2017-1086 and 2017-1198.) A final report recommending "specific actions to mitigate the burden imposed by" those and other regulations is due by September 18, 2017.

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Contact Information
For additional information concerning this Alert, please contact:
 
Washington Council Ernst & Young
   • Any member of the group, at (202) 293-7474;.

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ATTACHMENT

Notice 2017-36

 

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