TEI Submits Comments to the Treasury and IRS regarding Proposed BEAT Regulations

On February 19, 2019, TEI filed comments with the United States Department of the Treasury and Internal Revenue Service regarding proposed regulations promulgated under new section 59A. Section 59A, added to the Internal Revenue Code by the Tax Cuts & Jobs Act enacted in late 2017, imposes a new “base erosion and anti-abuse tax” (the BEAT) on certain U.S. taxpayers who make “base eroding payments” to related foreign parties. TEI’s comments recommended several modifications to the proposed BEAT regulations, including adding an exception for BEAT payments that are subpart F income, clarification of the BEAT anti-abuse rule, and removal of nonrecognition transactions from the definition of a BEAT payment, among other things. TEI’s comments were prepared under the aegis of the Institute’s Tax Reform Task Force and U.S. International Tax Committee. Benjamin Shreck, TEI Tax Counsel, coordinated the preparation of TEI’s submission.

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