October 1, 2019 BREAKING TAX NEWS | Treasury issues proposed regulations on determining CFC status under certain IRC provisions The Treasury Department has released proposed regulations limiting the impact of the repeal of IRC Section 958(b)(4) in determining the controlled foreign corporation (CFC) status of a foreign corporation when applying certain provisions of the Internal Revenue Code (IRC). Before repeal by the Tax Cuts and Jobs Act, IRC Section 958(b)(4) prevented a US subsidiary from being treated as owning stock in a foreign-owned brother-sister subsidiary for purposes of determining whether the brother-sister foreign subsidiary was a CFC. The proposed regulations do not provide broad relief from the repeal of IRC Section 958(b)(4) (so they would not reenact the repealed statutory limitation through Treasury regulations). Instead, the proposed regulations provide targeted relief by effectively causing select IRC provisions to apply as if IRC Section 958(b)(4) had not been repealed. The proposed regulations notably would:
A more detailed Tax Alert on the proposed regulations is forthcoming. | ||||
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