Treasury requests public comments on Sec. 385 and other regulations

Written on Jul 13, 2017

OSCPA staff report

On July 7, the Treasury Department announced it would review eight tax regulations it believes should be either rescinded or modified. Notice 2017-38 states the “Treasury Department’s review of significant tax regulations as directed by Executive Order 13789 and the regulations identified for burden reduction.” The notice is a response to President Trump’s executive order issued on April 21, 2017.  If modified, Treasury wants to know how to reduce each regulation’s burden and complexity.

The regulations identified are:

· Proposed Regulations under Section 103 on Definition of Political Subdivision

· Temporary Regulations under Section 337(d) on Certain Transfers of Property to Regulated Investment Companies (RICs) and Real Estate Investment Trusts (REITs) (T.D. 9770; 81 F.R. 36793)

· Final Regulations under Section 7602 on the Participation of a Person Described in Section 6103(n) in a Summons Interview (T.D. 9778; 81 F.R. 45409)

· Proposed Regulations under Section 2704 on Restrictions on Liquidation of an Interest for Estate, Gift and Generation-Skipping Transfer Taxes (REG-163113- 02; 81 F.R. 51413)

· Temporary Regulations under Section 752 on Liabilities Recognized as Recourse Partnership Liabilities (T.D. 9788; 81 F.R. 69282)

· Final and Temporary Regulations under Section 385 on the Treatment of Certain Interests in Corporations as Stock or Indebtedness (T.D. 9790; 81 F.R. 72858)

· Final Regulations under Section 987 on Income and Currency Gain or Loss With Respect to a Section 987 Qualified Business Unit (T.D. 9794; 81 F.R. 88806)

· Final Regulations under Section 367 on the Treatment of Certain Transfers of Property to Foreign Corporations (T.D. 9803; 81 F.R. 91012)

If the public would like to comment, they have until Aug. 7 to do so. OSCPA’s Federal Tax Committee plans to review the regulations, so please leave any suggestions for improvements in the comments.

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