On Friday, July 28, 2017, the Department of the Treasury and the Internal Revenue Service issued Notice 2017-36 announcing their intention to delay by 12 months the application of the intercompany debt documentation rules under Treasury Regulations § 1.385-2 to January 1, 2019. Without this delay, these regulations would have become effective, with respect to debt issued, on or after January 1, 2018. Pending the formal amendment of the effective date, taxpayers are permitted to rely on the delayed application in this Notice.
The regulations that are the subject of the Notice relate to the documentation generally necessary to be prepared and maintained for certain intercompany debt to be treated as debt for federal income tax purposes. Notice 2017-38 recently identified these regulations as significant tax regulations requiring additional review pursuant to Executive Order 13789.
Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Furthermore, this Tax update was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any U.S. federal, state or local tax penalties that may be imposed on such person.
Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.