Treasury Can Close a Potential Loophole in the Treatment of Deferred Foreign Income in the Tax Cuts and Jobs Act – Will It Act?

6 Pages Posted: 2 Jan 2018  

Stephen E. Shay

Harvard Law School

Date Written: December 26, 2017

Abstract

This paper points out a potential TJCA loophole allowing a reduction in aggregate foreign cash subject to the 15.5% rate unless Treasury takes steps to implement an anti-abuse rule. If Treasury does not act, aggressive taxpayers may be rewarded and cautious taxpayers may have incentives to make second-best uses of their offshore cash. This potential loophole can have material revenue consequences and is an example of the costs of rushed legislative consideration of tax legislation without adequate time to review and analyze bill text.

Keywords: Tax reform, international, deferred foreign income

Suggested Citation

Shay, Stephen E., Treasury Can Close a Potential Loophole in the Treatment of Deferred Foreign Income in the Tax Cuts and Jobs Act – Will It Act? (December 26, 2017). Available at SSRN: https://ssrn.com/abstract=3093379 or http://dx.doi.org/10.2139/ssrn.3093379

Stephen E. Shay (Contact Author)

Harvard Law School ( email )

1563 Manssachusetts Avenue
Cambridge, MA 02138
United States

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