IRS Unveils Guidance to Stop Tax-Free Income Repatriations

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IRS unveils guidance to stop transactions intended to repatriate earnings from foreign corporations without the appropriate recognition of income. The action comes as the government continues its efforts to prevent taxpayers from manipulating the tax rules to bring large amounts of money back to the United States tax-free. In Notice 2012-39, IRS says it plans to issue regulations to shut down deals involving transfers under tax code Section 367(d). The rules will be effective July 13, 2012, and IRS says the guidance will apply to outbound asset reorganizations that raise significant policy concerns.