2024-19027. Rules Regarding Dual Consolidated Losses and the Treatment of Certain Disregarded Payments; Correction

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Department of the Treasury

Internal Revenue Service

1. 26 CFR Parts 1 and 301
2. [REG-105128-23]
3. RIN 1545-BQ72

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Notice of proposed rulemaking; correction.

SUMMARY:

This document contains corrections to the proposed regulations (REG-105128-23), published in the Federal Register on August 7, 2024. The proposed regulations concern certain issues arising under the dual consolidated loss rules and the application of those rules to certain foreign taxes. The proposed regulations also include rules regarding certain disregarded payments that give rise to losses for foreign tax purposes.

DATES:

Written or electronic comments and requests for a public hearing are still being accepted and must be received by October 7, 2024.

FOR FURTHER INFORMATION CONTACT:

Andrew L. Wigmore at [phone] (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The proposed regulations (REG-105128-23) subject to this correction are proposed to be issued under sections 1502 and 1503(d) of the Internal Revenue Code.

Correction of Publication

Accordingly, FR Doc. 2024-16665 (REG-105128-23), appearing on page 64750 in the Federal Register on Wednesday, August 7, 2024, is corrected as follows:

1. On page 64753, in the third column, in the second partial paragraph, the third sentence is corrected to read “Where a taxpayer uses a fiscal year for tax purposes that ends after 2023, the foreign use exception is conditioned on the relevant MNE Group using the same fiscal year when applying the GloBE Model Rules.”.

2. On page 64762, in the third column, in the first full paragraph, the third sentence is corrected to read “The disregarded payment loss generally measures the entity's net loss, if any, for foreign tax purposes that is composed of certain payments that are disregarded for U.S. tax purposes as transactions ( print page 71215) between the disregarded payment entity and its tax owner (for example, a payment by the disregarded payment entity to the specified domestic owner or to another disregarded payment entity of the specified domestic owner).”.

§ 1.1502-13

[Corrected]

3. On page 64768, in the first column, in § 1.1502-13, the first sentence of paragraph (j)(15)(x)(C) is corrected to read “The facts are the same as in paragraph (j)(15)(x)(A) of this section, except that for the years at issue, B's interest expense deduction would be limited under the domestic use limitation rule of § 1.1503(d)-4(b) (and no exception under § 1.1503(d)-6 applies) and is not currently deductible.”.

4. Starting on page 64771, in amendatory instruction 3, in § 1.1503(d)-1:

a. On page 64771, in the second column, paragraph (d)(6)(ii)(C)( 2) is corrected.

b. On page 64771, in the second and third columns, paragraph (d)(6)(ii)(D)( 2) is corrected.

c. On page 64772, in the second column, the last sentence of paragraph (d)(7)(v) is corrected.

The corrections read as follows:

§ 1.1503(d)-1

[Corrected]

* * * * *

(d) * * *

(6) * * *

(ii) * * *

(C) * * *

( 2) The payment, accrual, or other transaction giving rise to the item is disregarded for U.S. tax purposes as a transaction between a disregarded entity and its tax owner (for example, a payment by a disregarded entity to its tax owner or to another disregarded entity held by its tax owner, or a payment from a dual resident corporation to its disregarded entity.

* * * * *

(D)

( 2) The payment, accrual, or other transaction giving rise to the item is disregarded for U.S. tax purposes as a transaction between a disregarded entity and its tax owner (for example, because it is a payment to a disregarded entity from the disregarded entity's tax owner or from another disregarded entity held by its tax owner, or a payment to a dual resident corporation from its disregarded entity).

* * * * *

(7) * * *

(v) * * * For purposes of this paragraph (d)(7)(v), the term hybrid mismatch rules has the meaning provided in § 1.267A-5(a)(10).

* * * * *

§ 1.1503(d)-7

[Corrected]

5. On page 64774, in the second column, amendatory instruction 7.12 for § 1.1503(d)-7 is corrected to read “In paragraph (c)(26)(i), removing the language from the sixth sentence `all of the interests' and adding the language `90 percent of the interests' in its place.”.

Oluwafunmilayo A. Taylor,

Chief, Publications and Regulations Section, Associate Chief Counsel (Procedure and Administration).