On December 13, 2018, the Internal Revenue Service and the Treasury Department issued proposed regulations (the “Proposed Regulations”) on the base erosion and anti-abuse tax (“BEAT”). As discussed in this memorandum, the Proposed Regulations would clarify some of the key aspects of the BEAT regime, but also include a number of surprises and do not provide specific rules on other issues that could have a critical impact on a taxpayer’s ultimate BEAT liability.