Daily Tax Update - October 9, 2015: Treasury, IRS Postpone Applicability Date of Embedded Loan Rule

Treasury, IRS Postpone Applicability Date of Embedded Loan Rule:  Today, Treasury and the IRS issued amended temporary regulations (T.D. 9719) under section 446 relating to guidance for the treatment of nonperiodic payments made or received pursuant to certain notional principal contracts.  The amendments delay the applicability of the embedded loan rule for the treatment of nonperiodic payments from November 4, 2015, to the later of January 1, 2017, or six months after the date the final regulations are published.  Under the temporary regulations, the embedded loan rule provides that, subject to certain exceptions, a notional principal contract with one or more nonperiodic payments will be treated as two separate transactions consisting of an on-market, level payment swap and one or more loans.

G-20 Finance Ministers Endorse OECD BEPS Project:  Today, the Organization for Economic Cooperation and Development (OECD) announced that during a meeting on October 8 in Lima, Peru the G-20 finance ministers endorsed the final package of measures proposed by the OECD/G-20 Base Erosion and Profit Shifting (BEPS) project.  The BEPS measures will next be considered by the G-20 heads of state during their summit on November 15-16 in Antalya, Turkey.  In a press release, OECD Secretary-General Angel Gurría stated that “[e]veryone has a stake in reversing base erosion and profit shifting. . . . The BEPS Project has shown that all stakeholders can come together to bring about change.  Swift implementation by governments will ensure a more certain and more sustainable international tax environment for the benefit of all, not just a few.”

Miscellaneous Guidance:  
Notice 2015-71 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3) and the 24-month average segment rates under section 430(h)(2).

Notice 2015-60 provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of the Patient-Centered Outcomes Research Institute (PCORI) fees imposed by sections 4375 and 4376 for policy years and plan years that end on or after October 1, 2015, and before October 1, 2016.