IRS Issues Regulations Related to CFC Loans

By on November 2, 2016

The Internal Revenue Service (IRS) has just released final regulations regarding the treatment of United States property held by a controlled foreign corporation (CFC) in connection with certain transactions involving partnerships. The final regulations also provide rules for determining whether a CFC is considered to derive rents and royalties in the active conduct of a trade or business for purposes of determining foreign personal holding company income, as well as rules for determining whether a CFC holds United States property as a result of certain related party factoring transactions. The new rules finalize proposed regulations, and withdraws temporary regulations, published on September 2, 2015. It also finalizes proposed regulations, and withdraws temporary regulations, published on June 14, 1988. In addition, the IRS has issued proposed regulations that provide rules regarding the determination of the amount of United States property treated as held by a CFC through a partnership. The final and proposed regulations affect United States shareholders of CFCs.

The final and proposed regulations can be found here and here.

Andrew R. Roberson
Andrew (Andy) R. Roberson focuses his practice on tax controversy and litigation matters. He represents clients before the Internal Revenue Service (IRS) Examination Division and Appeals Office and has been involved in over 75 matters at all levels of the federal court system, including the US Tax Court and Federal District Courts, several US Courts of Appeal and the Supreme Court. Andy has experience settling tax disputes through alternative dispute resolution procedures, including Fast Track Settlement and Post-Appeals Mediation, and in representing clients in Compliance Assurance Process (CAP) audits. In addition to representing corporations and partnerships in tax disputes, he also represents high net-worth individuals and assists taxpayers needing to make voluntary disclosures. Read Andy Roberson's full bio.