IRS provides travel disruption guidance on foreign branch DCL issues; Form 8858 filing

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May 2020

Overview

The IRS on May 7 issued Revenue Procedure 2020-30, providing guidance with respect to certain foreign branch issues raised by the COVID-19 pandemic. Rev. Proc. 2020-30 excludes certain ‘temporary activities’ from (1) resulting in an obligation to file a Form 8858 and (2) giving rise to a foreign branch separate unit for purposes of the Section 1503(d) dual consolidated loss (DCL) rules.

The takeaway

With the issuance of Rev. Proc. 2020-30, the IRS continues its trend of releasing guidance (formal and informal) to individuals and companies impacted by travel restrictions due to the COVID-19 pandemic. While this past April’s guidance (see Insight) primarily focused on inbound companies, Rev. Proc. 2020-30 is geared toward relief for outbound companies making foreign branch determinations. However, the guidance is limited to DCLs and Form 8858 filing obligations, and the IRS has only included a 60-day requirement for activities to qualify as ‘temporary activities.’

See also:

IRS issues guidance for individuals and businesses impacted by travel disruptions

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Doug McHoney

International Tax Services Co-Leader, PwC US

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