Guidance Unveiled on Changes for Foreign Company Shareholders

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IRS withdraws and reproposes regulations (REG-114749-09) clarifying the rules for controlling domestic shareholders to adopt or change a method of accounting or taxable year on behalf of a foreign corporation. The proposed rules clarify required book-to-tax adjustments, including those related to depreciation and amortization, under tax code Section 964, IRS says in the preamble to the guidance. That code section says that earnings and profits of foreign corporations are determined under rules similar to those that apply to domestic companies.