Treasury Releases Report on Obama “Midnight” Regulations

On April 21, 2017, President Trump signed Executive Order 13789, authorizing the Treasury Department to determine if any significant tax regulations issued on or after January 1, 2016 should be altered or eliminated.  On July 7, 2017, the IRS published Notice 2017-38, which identified certain regulations as targets for possible rescission or modification.  On October 4, 2017, the Treasury Department released a report outlining certain actions that it believes would reduce the burden of certain regulations identified in the Notice.  These actions include withdrawing some regulations completely, possibly revoking others in part, and possibly substantially revising others. October 4, 2017
Significant regulations targeted for withdrawal are:
  • Proposed Regulations under Section 2704 on Restrictions on Liquidation of an Interest for Estate, Gift and Generation-Skipping Transfer Taxes
Significant regulations targeted for possible part revocation:
  • Regulations under Section 707 and 752 on Treatment of Partnership Liabilities
  • Final and Temporary Regulations under Section 385 on the Treatment of Certain Interests in Corporations as Stock or Indebtedness
    • Treasury is considering a proposal to revoke the documentation regulations
    • Treasury plans to retain the distribution regulations, pending enactment of tax reform
Significant regulations targeted for possible substantial revision:
  • Final Regulations under Section 367 on the Treatment of Certain Transfers of Property to Foreign Corporations
  • Temporary Regulations under Section 337(d) on Certain Transfers of Property to Regulated Investment Companies (RICs) and Real Estate Investment Trusts (REITs)
  • Final Regulations under Section 987 on Income and Currency Gain or Loss with Respect to a Section 987 Qualified Business Unit