Treasury To Propose Reform of Eight Regulations Deemed Burdensome

by admin on July 11, 2017

Executive Order 13789 directed the Treasury to review regulations issued between 2016 and 2017

The US Treasury has identified 8 regulations which it will soon be targeted for reform. These regulations will be changing in accordance with Executive Order 13789. These regulations includes Sec. 385 implementing rules that would re-characterize certain transactions between related parties that are ostensibly debt as equity, curbing the practice of “earnings stripping,” and proposed regulations under Sec. 2704 that would prevent taxpayers from taking certain estate valuation discounts.

Issued in April Executive Order 13789 directed the Treasury to review regulations issued between 2016 and 2017 to determine which could be considered too costly, complexed, or exceeding the IRS’s statutory authority. It was determined 53 of the regulations issued within that year review period were “minor or insignificant” while 52 were deemed “potentially significant” and were then reviewed under the terms of the executive order. Eight Regulations qualified as significant and met the criteria of the executive order

Those eight regulations are:

  • Proposed regulations under Sec. 103 on the definition of political subdivision (REG-129067-15);
  • Temporary regulations under Sec. 337(d) on certain transfers of property to regulated investment companies (RICs) and real estate investment trusts (REITs) (T.D. 9770);
  • Final regulations under Sec. 7602 on the participation of a person described in Sec. 6103(n) in a summons interview (T.D. 9778);
  • Proposed regulations under Sec. 2704 on restrictions on liquidation of an interest for estate, gift, and generation-skipping transfer taxes (REG-163113-02);
  • Temporary regulations under Sec. 752 on liabilities recognized as recourse partnership liabilities (T.D. 9788);
  • Final and temporary regulations under Sec. 385 on the treatment of certain interests in corporations as stock or indebtedness (T.D. 9790);
  • Final regulations under Sec. 987 on income and currency gain or loss with respect to a Sec. 987 qualified business unit (T.D. 9794); and
  • Final regulations under Sec. 367 on the treatment of certain transfers of property to foreign corporations (T.D. 9803).

Under Executive Order 13789, the Treasury is directed to submit a final report to the President by Sept. 18, 2017, recommending specific actions to mitigate the burdens imposed by the identified regulations. T

he Treasury is asking the public for comments on whether these eight regulations should be rescinded or modified, and, if modified, how they can be modified to reduce burdens and complexity. Comments are due by Aug. 7.


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