Section 385 Proposed Regulations

SIFMA AMG provided comments to the Internal Revenue Service (IRS) and the Department of Treasury (Treasury) regarding proposed regulations under section 385 of the Internal Revenue Code. SIFMA AMG appreciates the efforts to limit the benefits of post-inversion tax avoidance transactions and discourage strategies that avoid U.S. tax by “stripping” U.S.-source earnings through intercompany debt. However, we believe the Proposed Regulations are too broad and reach beyond the IRS and Treasury’s objectives, resulting in unintended consequences for the financial sector and investors.

See also:

Notice of Proposed Rulemaking Treatment of Certain Interests in Corporations as Stock or Indebtedness