Overview
Finance Committee Republicans Express Concerns Over Proposed Debt-Equity Regulations: Republican members of the Senate Finance Committee, Senators Dean Heller (R-NV), Mike Crapo (R-ID), John Cornyn (R-TX), Johnny Isakson (R-GA), Pat Roberts (R-KS), John Thune (R-SD), and Tim Scott (R-SC) sent a letter to Secretary of Treasury Jacob Lew expressing concern over Treasury and the IRS’s proposed debt-equity regulations under section 385. The letter requests that Treasury extend the July 7 comment period deadline to at least October 5 and change the effective date for the rules so that they would apply to debt instruments issued, or deemed issued, no sooner than 90 days after the date the regulations are issued in final form.
The letter also requests that the proposed rules be substantially modified so that “ordinary business transactions unrelated to tax avoidance are not adversely affected” and lists several other concerns that the Senators have heard from stakeholders, including concerns related to the application of the proposed rules to S corporations, cash pooling, revolving credit agreements, foreign-to-foreign transactions, and small businesses. Some of the concerns and requests echo those contained in an earlier letter concerning the proposed regulations sent by Republicans on the House Ways and Means Committee. For prior coverage, click here.
OECD Releases BEPS Discussion Drafts: The OECD released a discussion draft of guidance on the attribution of profits to permanent establishments and a discussion draft of proposed revisions to OECD transfer pricing guidelines on profit splits. Comments are requested on both drafts by September 5.
Ways and Means Announces Markup of Asset Foreiture Bill: The House Ways and Means Committee announced that it will markup the RESPECT Act on July 7. The bill, sponsored by Rep. Peter Roskam (R-IL) and Rep. Joe Crowley (D-NY), is intended to help ensure assets of small businesses are not wrongly seized under civil asset forfeiture policies.