The IRS has issued proposed regulations to modify existing rules
on gain recognition agreement (GRA) reporting, apply a new standard
in obtaining relief from late or otherwise deficient GRAs and
require additional reporting on Form 926.
The proposed regulations would make several significant changes
to the rules. First, they would require a transferor to report
basis and fair market value of transferred property on Form 926,
which previously was not required if the information was reported
on a GRA filing. The proposed rules would also change the standard
for obtaining relief under Section 367(a) for either a failure to
timely file or to materially comply with a GRA. The reasonable
cause standard would be removed, and instead the IRS would grant
relief if the failure to file or to comply was determined not to be
willful. The proposed regulations provide examples of meeting the
new standard, including in one example notably indicating that
willful intent would include
