The Treasury Targeting the Recent Section 385 Debt-Equity Regulations (and Others) for Potential Repeal... [ read ]
On Friday, July 7th, the U.S. Department of the Treasury (the "Treasury") announced in Notice 2017-38 that it is targeting eight tax regulations for potential repeal. Included in the eight targeted are the final section 385 regulations issued in October of 2016. In a previous article from December of 2016, I discussed the onerous documentation requirements under the final section 385 regulations for related-party debt and touched on what effect these requirements may have on closely-held corporations. The Treasury's announcement could prove as a relief to those corporations dreading the potential financial burden resulting from the new documentation requirements.