Submission to IRS and Treasury Concerning Notice 2018-43, 2018-2019 Priority Guidance Plan - International Tax Issues Including Profit Shifting

Abstract

This letter to the Treasury and the IRS is in response to Notice 2-43’s request for recommendations for the 2-2 Priority Guidance Plan on tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. Many of the recommendations concern profit shifting by multinationals.

The letter provides extensive and specific suggestions for a number of international tax areas including:

-- Sourcing rules (§§863 and 864 in particular),

-- Entity classification rules (Reg §301.7701-1(a)(2)),

-- Subpart F manufacturing branch rule (Reg §1.954-3(b)), and

-- Application of tax treaties (Reg §1.894-1(d)).

Keywords: Profit Shifting, Notice 2-43, Sourcing Of Income, Subpart F, Entity Classification Rules, Check-The-Box, Manufacturing Branch Rule, Tax Treaties

JEL Classification: H21, H25, K34, E62