AICPA Urges Withdrawal of Half of Regulations Identified by Treasury’s Review of Tax Rules under President Trump’s Executive Order

The American Institute of CPAs (AICPA) has written to the Internal Revenue Service (IRS) recommending withdrawal of four of the eight regulations listed in the IRS’s notice identifying eight specific regulations for further review and possible action under President Trump’s Executive Order 13789, which directed the Secretary of the Treasury to immediately review all significant tax regulations issued by the Department of the Treasury on or after Jan. 1, 2016.

The affected regulations are those issued under:

• section 2704 regarding restrictions on liquidation of an interest and the valuation of interests in corporations and partnerships for estate, gift, and generation-skipping transfer tax purposes,
• section 385 regarding recharacterization of certain debt instruments issued between related corporations, as equity for United States (U.S.) federal income tax purposes,
• section 987 regarding income and currency gain or loss with respect to a qualified business unit, and
• section 367 regarding the exception for outbound transfers of foreign goodwill and going concern value and  the application of the active foreign trade or business exception.

The AICPA noted in its letter that it had “taken no position on the remaining regulations listed in Notice 2017-38 and our silence on them does not indicate our support or opposition to their modification or repeal.”