Treasury and IRS propose to remove the Section 385 documentation regulations

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September 2018

Overview

Today, September 21, Treasury and the IRS issued proposed regulations that would revoke the documentation rules under the now-existing Section 385 regulations.

Treasury originally released proposed Section 385 regulations on April 4, 2016, and then final regulations on October 21, 2016 with documentation rules applying to interests issued on or after January 1, 2018. On July 28, 2017, the IRS issued Notice 2017-36, which delayed the application of documentation rules to interests issued on or after January 1, 2019. Later that year, on October 4, 2017, Treasury announced that it planned to withdraw the anti-inversion documentation rules under Treas. Reg. sec. 1.385-2, and replace them with streamlined documentation rules. These new proposed regulations withdraw Treas. Reg. sec. 1.385-2.

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Michael DiFronzo

Partner, Washington National Tax Services ITS Leader, PwC US

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