Analysis

IRS More Likely To Change Than Ax Debt-Equity Regs

Law360, New York (August 9, 2017, 10:03 PM EDT) -- The tide may be turning in favor of controversial Obama-era regulations that discourage corporate inversions and that have been targeted for repeal, and experts caution that it is unrealistically optimistic to expect these rules will be dead in the water.

The Section 385 regulations, which recharacterize certain corporate debt as equity and prevent an accounting maneuver called “earnings stripping” to shift profits to low-tax jurisdictions, have gained support since they were first proposed in April 2016 and caused a furor among Democrats, Republicans and business groups...
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