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06 August 2018

US Treasury Department releases proposed Section 965 regulations

Executive summary

On 1 August 2018, the United States (US) Treasury Department issued proposed regulations under and related to Internal Revenue Code (Code) Section 965 (Proposed Regulations).

The Proposed Regulations include, with certain modifications, the provisions announced in three prior Internal Revenue Service (IRS) Notices (Section 965 Notices), one revenue procedure, various "frequently-asked questions" released by the IRS concerning the payment and reporting of a taxpayer's Section 965 inclusion and related tax liability, and IRS Publication 5292. The Proposed Regulations not only implement the rules described in the Section 965 Notices, but also provide additional rules related to:

  • Determinations of foreign tax credits associated with Section 965 inclusions and distributions of previously taxed earnings and profits (E&P) created by Section 965
  • Adjustments to E&P and stock basis
  • Affiliated groups, including affiliated groups that file consolidated returns
  • Transactions, accounting methods changes and entity-classification elections to be disregarded for purposes of Section 965
  • Subpart F income otherwise earned by foreign corporations during the inclusion year and
  • Expense allocation and apportionment

These rules and the other provisions in the Proposed Regulations are discussed below.

Detailed discussion

Download the PDF file for a detailed discussion of the Proposed Regulations.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP, International Tax Services

  • Craig Hillier, Boston
    craig.hillier@ey.com
  • Jose Murillo, Washington, DC
    jose.murillo@ey.com
  • Joshua Ruland, Washington, DC
    joshua.ruland@ey.com
  • Martin Milner, Washington, DC
    martin.milner@ey.com
  • Sue Lippe, Chicago
    sue.lippe@ey.com
  • Jennifer Cobb, Houston
    jennifer.cobb@ey.com
  • Stephen Peng, Washington, DC
    stephen.peng@ey.com
  • Trey Whitten, Washington, DC
    trey.whitten1@ey.com

Ernst & Young LLP, Tax Accounting and Risk Advisory Services

  • Angela Evans, Atlanta
    angela.evans@ey.com
  • Joan Schumaker, New York
    joan.schumaker@ey.com

Ernst & Young LLP, Tax Controversy and Risk Management Services

  • Matthew Cooper, Washington, DC
    matthew.cooper@ey.com

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ATTACHMENT

PDF version of this Tax Alert

 

Document ID: 2018-5944

 
 

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