Group Urges Changes to IRS Rules on Previously Taxed Income

The IRS should allow taxpayers to rely on its proposed regulations on previously taxed income until they’re finalized, and should clarify and coordinate the proposed rules as they apply to foreign nongrantor trusts, an accountants’ group said.

The lack of any express IRS statement that taxpayers can rely on the rules on previously taxed earnings and profits, or PTEP, has created uncertainty and could lead to contrary views or misinterpretations of the rules, the American Institute of CPAs said in a May 14 comment letter.

The proposed PTEP rules for distributions from foreign corporations and distributions from foreign nongrantor ...