IRS: Focus on Hybrids Putting Spotlight on Dual Consolidated Loss Rules

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The focus on hybrid structures is growing as foreign governments and the U.S. put the issue under the microscope, a key Internal Revenue Service official said—a development that is bringing the dual consolidated loss regime back into the spotlight.
John Merrick, special counsel to the IRS associate chief counsel (International), cited the fact that hybrid entities are under scrutiny in the Organization for Economic Cooperation and Development's project on base erosion and profit shifting as evidence that the rules are important.
“Of late there's been given a lot more attention to hybridity,” he said May 9 in response to practitioner comments that the dual consolidated loss (DCL) regulations haven't been popular. He spoke at the May meeting of the American Bar Association Section of Taxation.

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