IRS Retreat on Disregarded Payment Rules Eases Business Concerns

The Treasury Department’s planned rollbacks of what some call “ill-advised and rushed” regulations on disregarded payment losses are being cheered by practitioners and business groups, who say they’re too onerous and complex and not in line with US law.

The regulations eliminated a business-friendly “double-dipping” practice that gave companies an overseas tax deduction on disregarded payment losses without having to count the payments on the US side. DPLs are payments like royalties or interest made to a US company from entities that are “disregarded” for US tax purposes.

Tax departments are “breathing a sigh of relief” that rolling back the ...