The Treasury Department and IRS in early April 2016 released proposed regulations under section 385 regarding the treatment of certain related-party corporate interests as debt or equity for U.S. federal income tax purposes. Comments concerning the proposed regulations were due yesterday, July 7, 2016.
Treasury and the IRS received in excess of 150 comment letters about the proposed regulations under section 385, and now can begin the process of reviewing the letters.
Read KPMG LLP’s comment letter [PDF 1.1 MB] submitted in response to the proposed regulations under section 385.
Treasury officials yesterday met with members of the Senate Finance and House Ways and Means committees regarding the proposed section 385 regulations. A release from the Ways and Means Committee includes a comment from Chairman Kevin Brady (R-TX) about the “negative consequences of the proposed regulations.”
Prior to yesterday’s meeting (organized by the Joint Committee on Taxation), members of Congress had written to Treasury Secretary Lew to express concerns about the proposed regulations. A letter from Republican members of the Senate Finance Committee on July 1, 2016, followed two other letters to Secretary Lew expressing concerns regarding the section 385 proposed regulations—letters previously sent by both Republican and Democratic members of the House Ways and Means Committee. Read TaxNewsFlash-Legislative Update
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