Paul Schmidt Comments on Suspense Surrounding Fate of Earnings-Stripping Rules

News / July 17, 2017

Partner Paul Schmidt is quoted in an article published July 17, 2017, by Bloomberg BNA’s Daily Tax Report. The article, “Companies Want Quick Answers on Earnings-Stripping Rules,” reports on the uncertainly regarding the Treasury Department’s intentions toward current regulations intended to prevent multinational companies from moving income out of the United States through loans to subsidiaries. The rules are under consideration for modification, but the Treasury Department has not yet made recommendations. A decision isn’t required until September.

Schmidt told Bloomberg, “There is no reason Treasury has to wait until September to announce what they intend to do with the section 385 regulations. I am not optimistic that they will do anything before the September deadline, but I am not aware of anything preventing them from doing so.” He also noted that when a decision is made, the Treasury Department could issue a notice delaying the effective date or intent to repeal, and “Taxpayers could rely on that and it would give them what they need.”

Read the article (registration required).