Priority Tax Guidance To Be Released as Soon As Monday: IRS

The IRS will release its next priority guidance plan soon and intends to focus on the 2017 tax law rules before turning its attention to expiring rules, agency officials said.

The guidance plan “may very well be out on Monday,” Daniel M. McCall, the deputy associate chief counsel (International) at the Internal Revenue Service, said Oct. 4 at the American Bar Association tax section meeting in San Francisco.

The priority guidance plan charts the agency’s course for tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance.

The agency intends to first put a bulk of its attention on regulations from the 2017 tax overhaul, which include:

• a package on the base-erosion and anti-abuse tax under tax code Section 59A;
• final and proposed rules under foreign tax credits;
• proposed regulations about a high tax exclusion under the global intangible low-taxed income;
• hybrid mismatch rules referring to Sections 245A(9)(e) and 267A that are aimed at preventing multinationals from obtaining double tax benefits across jurisdictions;
• final rules for the foreign-derived intangible income provision;
• and international pieces in a 163(j) package.

The hybrid mismatch rules are very far along, Douglas Poms, senior counsel to the Treasury Department’s international tax counsel, said.

“One thing to look for is where it varied from the OECD approach,” Poms said, adding that the forthcoming rules will address notional interest deductions and interest-free loans.

The IRS’s next focus is on tax regulations with expiring components, said Peter H. Blessing, the agency’s associate chief counsel (International). Those rules include:

• Tax code Section 987 on branch transactions;
• Section 871(m) on the treatment of dividend equivalent payments;
• Section 385 on treatment of certain corporate interests as stock or debt;
• and Section 721 on nonrecognition of gain or loss on contribution.

—With assistance from Siri Bulusu