N-2014-52: Rules Regarding Inversions and Related Transactions
Internal Revenue Service (IRS) sent this bulletin at 09/23/2014 11:44 AM EDT
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Issue Number: N-2014-52Inside This IssueNotice 2014-52 describes regulations that the IRS and Treasury Department intend to issue with respect to inversion transactions. Such regulations will (i) for purposes of section 7874, disregard certain stock of a foreign acquiring corporation that holds a significant amount of passive assets; (ii) for purposes of sections 7874 and 367, disregard certain non-ordinary course distributions; (iii) for purposes of section 7874, provide guidance on the treatment of certain transfers of stock of a foreign acquiring corporation (through a spin-off or otherwise) that occur after an acquisition; (iv) prevent the avoidance of section 956 through post-inversion acquisitions by controlled foreign corporations (CFCs) of obligations of (or equity investments in) the new foreign parent corporation or its non-CFC foreign affiliates; (v) prevent the avoidance of U.S. tax on pre-inversion earnings and profits of CFCs through post-inversion transactions that otherwise would terminate the CFC status of foreign subsidiaries and/or substantially dilute the U.S. shareholder’s interest in those earnings and profits; and (vi) limit the ability to remove untaxed foreign earnings and profits of CFCs through related party stock sales subject to section 304. Notice 2014-52 will appear in IRB 2014-42 dated Oct. 14, 2014. Thank you for subscribing to IRS GuideWire, an IRS e-mail service. If you are a Tax Professional and have a specific concern about your tax situation, call the IRS Practitioner Priority Service 1-866-860-4259. This message was distributed automatically from the IRS GuideWire mailing list. Please Do Not Reply To This Message. |