Documentation Rules Round 2—A Taxpayer Project for 2016 Not 2018

November 1, 2016

The documentation rules in the final section 385 regulations released October 13 are better than the April version, except for the fact that they will now apply broadly to trade receivables and payables as well as intercompany debt.

But the regulations have become even more complex, and on a technical level still need some work. We have identified 10 features of the regulations that would benefit from clarification or repair before the January 1, 2018 effective date.

It would be prudent for taxpayers to do a dry run and try to apply the rules to their particular circumstances over the next few months so that any additional issues with the regulations can be surfaced and potentially addressed.