The Treasury Department identified eight regulations, including final and temporary regulations under Section 385, as imposing an undue financial burden on US taxpayers or adding undue complexity to federal tax laws.

An executive order signed by President Trump April 21, 2017, called for Treasury to review all "significant tax regulations" issued on or after January 1, 2016, and to identify in an interim report those that impose undue financial burden, add undue complexity or exceed statutory authority. The order further instructed Treasury to submit a final report to the President by September 18, 2017, recommending "specific actions to mitigate the burden imposed by regulations identified in the interim report."

Notice 2017-38, released today, identified specific regulations as unduly burdensome or complex and stated that Treasury intends to submit a report to the President with proposed reforms "potentially ranging from streamlining problematic rule provisions to full repeal."

The eight regulations identified for burden reduction are:

1. T.D. 9790: final and temporary regulations under Section 385 on the treatment of certain interests in corporations as stock or indebtedness. (See Tax Alert 2016-1776.)

2. T.D. 9794: final regulations under Section 987 providing guidance to corporate and individual taxpayers on determining their taxable income or loss with respect to certain branch operations (known as a qualified business unit (QBU) that use a different functional currency than the QBU's owner, as well as the timing, amount, character, and source of any Section 987 gain or loss arising from that QBU. (See Tax Alerts 2017-55 and 2016-2117.)

3. T.D. 9803: final regulations under Section 367 eliminating the foreign goodwill exception and limiting the Section 367(a)(3) active trade or business exception to certain tangible property and financial assets. (See Tax Alert 2016-2193.)

4. T.D. 9770: temporary regulations under Section 337(d) regarding certain property transfers to regulated investment companies and real estate investment trusts. (See Tax Alert 2016-1083.)

5. T.D. 9788: temporary regulations under Section 752 on liabilities recognized as recourse partnership liabilities. (See Tax Alert 2016-1715.)

6. REG-163113-02: proposed regulations under Section 2704 providing guidance on how the value of interests in corporations, partnerships, limited liability companies and other business entities should be determined for estate, gift and generation-skipping transfer tax purposes. (See Tax Alert 2016-1345.)

7. REG-129067-15: proposed regulations under Section 103 on the definition of a political subdivision.

8. T.D. 9778: final regulations under Section 7602 addressing the participation in a summons interview of a person with whom the IRS has contracted for services, such as an economist, engineer, consultant or attorney.

Treasury requests comments by August 7, 2017, on whether these eight regulations should be rescinded or modified, and how they should be modified.