The Treasury Department and IRS in early April 2016 released proposed regulations under section 385 regarding the treatment of certain related-party corporate interests as debt or equity for U.S. federal income tax purposes. Comments concerning the proposed regulations were due yesterday, July 7, 2016.
Treasury and the IRS received in excess of 150 comment letters about the proposed regulations under section 385, and now can begin the process of reviewing the letters.
Read KPMG LLP’s comment letter [PDF 1.1 MB] submitted in response to the proposed regulations under section 385.
Treasury officials yesterday met with members of the Senate Finance and House Ways and Means committees regarding the proposed section 385 regulations. A release from the Ways and Means Committee includes a comment from Chairman Kevin Brady (R-TX) about the “negative consequences of the proposed regulations.”
Prior to yesterday’s meeting (organized by the Joint Committee on Taxation), members of Congress had written to Treasury Secretary Lew to express concerns about the proposed regulations. A letter from Republican members of the Senate Finance Committee on July 1, 2016, followed two other letters to Secretary Lew expressing concerns regarding the section 385 proposed regulations—letters previously sent by both Republican and Democratic members of the House Ways and Means Committee. Read TaxNewsFlash-Legislative Update
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.