In This Issue:

- Deferred Earnings and Profits of CFCs

- Code Section 956(e)

- Code Section 7701(l)

- Code Section 304(b)(5)(B)

- Code Section 7874

- Request for Comments

- For More Information

- Excerpt from Deferred Earnings and Profits of CFCs:

The Notice focuses primarily on preventing the foreign parent from accessing the deferred earnings and profits of existing CFCs by proposing Treasury regulations under three different Code sections: Sections 956(e), 7701(l) and 304(b)(5)(B). The Notice also proposes Treasury regulations under Section 7874 of the Code to prevent the use of “cash box” foreign corporations or tailoring the assets of the former U.S. corporate group to allow former shareholders to own less than 80% or 60% of its new foreign parent. Finally, the Notice prevents a U.S. parent corporation from contributing a portion of its assets to a newly formed foreign subsidiary which it spins off to its shareholders.