BTAX Onpoint: Final and Proposed Downward Attribution Rules

The IRS has issued final and proposed rules on a 2017 tax overhaul change impacting foreign corporations.

The agency released the guidance on Sept. 21. The final regulations (T.D. 9908) make some modifications to the 2019 proposed version.

The 2017 tax overhaul repealed tax code Section 958(b)(4). As a result, stock of a corporation—including a foreign corporation—owned by a foreign person can now be attributed to a U.S. person for various purposes.

A controlled foreign corporation is a foreign corporation in which more than 50% of the voting power or more than 50% of the total ...