IRS Clarifies Controlled Foreign Corporation Ownership Rules (1)

The IRS is proposing to reduce the reporting burden of foreign corporations under the 2017 tax law.

The proposed rules (REG-104223-18) and Revenue Procedure 2019-40 provide penalty relief and simplified reporting requirements for foreign corporations that are deemed to be U.S. controlled foreign corporations due to the repeal of stock attribution rules. A controlled foreign corporation is majority owned by U.S. shareholders who own 10% or more of the total stock.

• The Oct. 1 proposed rules aim to make sure different sections of the tax code on CFC ownership are in line with each other following the 2017 ...