Evaluating Implicit Support in Intercompany Loans

In each Internal Revenue Service (IRS) Priority Guidance Plan release since September 9, 2021, the IRS has stated that it was prioritizing work on regulations that clarify the effects of group membership in determining an arm’s-length price (Dept. of the Treasury 2021-2022 Priority Guidance Plan (Sept. 9, 2021)). Although it has not issued any regulations on the topic, IRS Office of Chief Counsel issued generic legal advice memorandum AM 2023-008 (the GLAM) on December 29, 2023, to state its position on the topic. In the GLAM, the IRS stated that it may consider group membership and potential implicit support in ...