One-Year Delay To The Application Of Section 385 Documentation Rules

On July 28, 2017, the Treasury Department and the IRS announced in Notice 2017-36 (the "Notice") that they will delay the documentation rules of Treasury regulation section 1.385-2 to debt instruments issued or deemed to be issued on or after January 1, 2019. The documentation rules would have originally applied to debt instruments issued or deemed to be issued on or after January 1, 2018. The section 385 Treasury regulations introduced new documentation requirements and additional rules for intercompany debt. The Notice cites the Trump Administration's Executive Order to examine rules that could be modified or rescinded for imposing an undue financial burden on taxpayers and the subsequent identification of the section 385 final and temporary Treasury regulations as significant tax regulations requiring additional review pursuant to such Executive Order. In the Notice, the Treasury Department and the IRS cited the ongoing concerns raised by taxpayers regarding the