Memo #
30164

IRS and Treasury Release 2016-2017 Priority Guidance Plan - Tax Items
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[30164]

August 24, 2016

TO: ACCOUNTING/TREASURERS MEMBERS No. 22-16
INTERNATIONAL MEMBERS No. 17-16
TAX MEMBERS No. 15-16
TRANSFER AGENT ADVISORY COMMITTEE No. 39-16 RE: IRS AND TREASURY RELEASE 2016-2017 PRIORITY GUIDANCE PLAN - TAX ITEMS

 

The Treasury Department and the Internal Revenue Service (“IRS”) have released the 2016-2017 Priority Guidance Plan, listing their priorities for tax regulations and other administrative guidance through June 2017. Several projects of interest to funds and fund shareholders, which have been requested by the Institute, [1] are included in the plan: [2]

  • Final regulations under §§ 305(c) and 1441 regarding the amount and timing of, and the withholding obligations on, deemed distributions from conversion ratio adjustments on convertible debt and stock.
  • Regulations under § 446 relating to the timing and character of payments, including contingent payments, made pursuant to notional principal contracts (NPCs) and prepaid forward contracts.
  • Regulations relating to accruals of interest (including discount) on distressed debt.
  • Guidance under §§ 1295, 1297, and 1298 on passive foreign investment companies.
  • Guidance under Chapter 3 (§§1441-1446) and Chapter 4 (§§1471-1474), including regulations on verification requirements for sponsoring entities for Chapter 4 purposes; revenue procedures provided updated agreements for foreign financial institutions, qualified intermediaries (including qualified derivatives dealers), and withholding foreign partnerships and withholding foreign trusts; and regulations on refunds and credits.
  • Regulations under § 7701 coordinating the entity classification election with elections under Subchapter M.

The 2016-2017 Priority Guidance Plan includes several other items of interest to funds, fund shareholders, and management companies:

  • Final regulations under § 337(d) regarding certain transfers of C corporation property to real estate investment trusts and regulated investment companies.
  • Final regulations under § 385 regarding treatment of certain interests in corporations as stock.
  • Regulations relating to the applicable high yield discount obligation rules in § 163(e)(5) and (i).
  • Regulations under § 246 relating to diminished risk of loss.
  • Guidance under § 446 relating to accounting for hedging transactions.
  • Guidance under § 851 relating to investments in stock and securities.
  • Regulations under § 1001 on the modification of nondebt financial instruments.
  • Regulations under § 1001 on the modification of debt instruments, including issues relating to disregarded entities.
  • Final regulations on the application of § 1256 to certain derivative contracts.
  • Regulations under § 7872.
  • Regulations under § 1012 regarding basis rules for stock and debt.
  • Final regulations under § 1411 regarding issues related to the net investment income tax.
  • Final regulations under § 7701 regarding series LLCs and cell companies.
  • Final regulations under § 871(m) on dividend equivalent payments.
  • Guidance under § 894 and treaties, including regarding the application of various treaty provisions to hybrid entities and instruments.
  • Guidance on § 988 transactions.
  • Guidance under § 446 regarding the effect of new financial accounting standards on tax accounting.
  • Guidance on corrected information returns.
  • Guidance regarding partnership audit and adjustment procedures under TEFRA and the Bipartisan Budget Act of 2015.
  • Guidance on safe harbors for de minimis errors on information returns and payee statements under § 202 of the Protecting Americans from Tax Hikes Act of 2015.

 

Karen Lau Gibian
Associate General Counsel

Attachment

endnotes

[1] The Institute’s recommendations for the 2016-2017 Guidance Priority Plan are attached.

[2] For a discussion of the retirement savings items, see Institute Memorandum (30161) dated August 23, 2016.