Earlier this week the IRS published two sets of regulations addressing when a US owner of a Controlled Foreign Corporation (CFC) has a deemed repatriation through the use of a CFC-owned foreign partnership. The regulations are based on Section 956, which in essence deems a repatriation to the extent a CFC invests in “U.S. property” – which includes loans by the CFC to its owners and certain pledges by the U.S. owners of the CFC stock or assets. The new temporary and final regulations attack situations where a CFC, instead of doing a prohibited direct loan to its U.S. owner, forms a controlled partnership that instead makes the loan to the U.S. owner. In addition, the regulations provide that the Section 956 anti-abuse rule is not limited to entities that are funded with capital contributions or debt, and clarify that any tax attributes associated with an inclusion under Section 956 will be taken into account in applying the anti-abuse rule. The new proposed regulations go farther with respect to foreign partnerships owned by CFCs, and generally treat an obligation of a foreign partnership as an obligation of its partners to the extent of each partner’s share of the obligation, as determined in accordance with the partner’s interest in partnership profits. The proposed regulations also address a number of aggregate-entity partnership questions under Section 956, including extending certain current pledge and guarantee rules to pledges and guarantees made by partnerships. The regulations are generally effective on September 1, 2015 and apply to property acquired, or pledges or guarantees entered into, on or after September 1, 2015.