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Good News for Taxpayers: IRS Targets for Reform Burdensome Regulations on Partnerships, Corporations, Reits, Estates, and More

July 18, 2017

By: Amanda Wilson

Earlier this year, President Trump issued Executive Order 13789, which ordered the Treasury Department to review all significant tax regulations issued after December 31, 2015 and identify regulations that impose an undue burden (financially or administratively) on taxpayers. The Executive Order then instructed the Treasury Department to recommend specific reform actions that can be taken to mitigate this burden.

On July 7, 2017, the Treasury Department and the Internal Revenue Service took the first step in this process by issuing Notice 2017-38, which identifies eight burdensome regulations that should be reformed. These regulations are:

  • Proposed regulations under Section 103 defining a “political subdivision” of a State that is eligible to issue tax-exempt bonds.
  • Temporary regulations under Section 337(d) dealing with transfers of property by C corporations to REITs and RICs, including rules designed to prohibit/limit tax-free spinoffs of REITS and RICs.
  • Final regulations under Section 7602 on the participation of certain persons in a summons interview.
  • Proposed regulations under Section 2704 limiting lack of marketability discounts of an interest for estate, gift and generation skipping taxes.
  • Temporary regulations under Section 752 dealing with allocation of liabilities for disguised sale purposes and treatment of bottom-dollar guarantees.
  • Final and Temporary regulations under Section 385 dealing with characterization of related-party debt as debt or equity for tax purposes.
  • Final regulations under Section 987 dealing with currency gains or losses with respect to a qualified business unit.
  • Final regulations under Section 367 dealing with the treatment of certain transfers of property to foreign corporations.

The next step will be for the Treasury Department and IRS to recommend their proposed reforms for these regulations, which could range from modification to full repeal of the regulations.  While it is not yet known to what extent these regulations will be modified or repealed, their identification as burdensome is good news for taxpayers.  Many of these regulations have been widely criticized by the tax community, and any changes will likely be beneficial to taxpayers.

To keep informed as this process moves forward, visit our tax blog, Lowndes Taxing Times.


Amanda

A member of the firm’s tax practice, Amanda Wilson concentrates on federal tax planning and structuring. She represents clients in a wide variety of complex federal tax matters with a particular emphasis on pass-through entities such as partnerships, S corporations and real estate investment trusts. Specifically, Amanda focuses on advising clients on the formation, operation, acquisition and restructuring of such pass-through entities. In addition, she regularly advises clients on the structuring and operation of private equity funds, real estate funds and timber funds. Amanda is the author of the Bloomberg Tax Management Portfolio 718-3rd Edition, Partnerships- Disposition of Partnership Interests or Partnership Business; Partnership Termination.

Amanda regularly works in structuring deals to benefit from tax advantaged structures, including like-kind exchanges, new market tax credits, low income housing tax credits, and qualified opportunity zones. Amanda also has extensive experience in corporate planning and international tax matters, as well as federal tax controversy. Her practice before the Internal Revenue Service (IRS) includes providing advice on audits and appeals, drafting protests and ruling requests, and negotiating settlements.

Prior to joining the firm, Amanda worked for Sutherland Asbill & Brennan LLP (now Eversheds Sutherland), an Am Law 100 firm in the Atlanta office, where she was part of Sutherland’s Tax Practice Group. Amanda has also served as an adjunct professor at Emory University School of Law where she taught Partnership Taxation.

Amanda regularly contributes to the firm’s Taxing Times blog and is a regular panelist on tax webinars hosted by Strafford Publications.

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