IRS Mulling More Fixes to Lingering Dividend Deduction Issues

The IRS is seeking additional comments on the dividends-received deduction, as the agency considers which issues to address in potential future guidance.

The 2017 tax law added new tax code Section 245A, which allows a domestic corporation owning at least 10% of a foreign company’s stock—either by vote or value—to deduct 100% of the foreign source portion of dividends received from that foreign corporation. Taxpayers have wanted additional guidance to address how the deduction interacts with other areas of the tax code that weren’t addressed in previously issued regulations.

“We understand that taxpayers are anxious for guidance on issues ...