IRS, Treasury to Issue Rules Stemming From ‘Blocker' Deal Transactions

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Treasury and IRS indicate in Notice 2010-41 their intent to issue regulations to classify certain domestic partnerships as foreign for purposes of identifying the U.S. shareholders of a controlled foreign corporation that must include, in gross income, the amounts specified under tax code Section 951(a) of such a CFC. The transaction at issue—a “Subpart F income partnership blocker” deal—was previously identified as a transaction of interest. Jackie Levinson, an IRS special counsel to the Associate Chief Counsel International, says tax practitioners may want to begin reviewing their clients' corporate structures following the notice.