Law360, New York ( April 15, 2015, 4:15 PM EDT) -- In a recent chief counsel memorandum (AM 2015-01), the IRS addressed a long-uncertain tax question: when a U.S. corporate shareholder includes an amount in income under subpart F, does the subpart F inclusion increase the corporate shareholder's "earnings and profits" immediately or only when the earnings are actually distributed as a tax-free distribution of previously taxed income (PTI)? Despite the IRS's answer, the AM primarily reveals the ambiguity inherent in the question. As can be gleaned from the AM, "earnings and profits" and PTI questions remain uncertain at best and difficult to predict without reference to the specific facts and provision at issue and exercise of careful judgment....
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