IRS Finalizes Section 367 Regulations

By on December 16, 2016

The Internal Revenue Service (IRS) has finalized regulations that tax transfers of certain property, including goodwill and going concern value, to foreign corporations in nonrecognition transactions described in Internal Revenue Code Section 367.  The final regulations replace proposed regulations published on September 16, 2015 and temporary regulations published in 1986.

We previously discussed the 2015 proposed regulations and why they were viewed as controversial when issued given the elimination of favorable tax treatment for transfers of foreign goodwill and going concern value to foreign corporations. The final regulations followed the proposed regulations on this point, which may lead to future litigation over the validity of the final regulations. Taxpayers should carefully review these final regulations and be aware of potential arguments that may exist for challenging the positions taken by the IRS.

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.