The IRS on October 17 released draft instructions for Form 8991 (Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts). The instructions provide guidance for completing Form 8991, which taxpayers use to compute their Base Erosion and Anti-Abuse Tax (BEAT) liability under Section 59A.
In addition, the IRS on October 29 released draft Form 8990 (Limitation on Business Interest Expense under Section 163(j)). The form is to be used for determining a taxpayer’s current year business interest expense deduction and disallowed interest expense. The instructions to the form have not yet been released.
With the release of draft Form 8990, taxpayers have some guidance on how to compute their current-year business interest expense deduction and disallowed interest expense under amended Section 163(j). However, further instructions are needed for completing the form.
The instructions to draft Form 8991 are helpful in summarizing many of the key definitions from Section 59A. However, they still do not address our previously mentioned unanswered questions.
The upcoming proposed regulations under Sections 59A and 163(j) are anticipated to provide further guidance.
Please note that these are draft forms, which are subject to change and should not be relied upon or filed.
Partner, Washington National Tax Services ITS Leader, PwC US