IRS Drops Notice Affecting Domestic Partnerships or S Corporations with GILTI

August 2019

The information in BDO alerts is dependent on tax policies at the time they are published.
The subject matter of this alert has since been updated. To find the latest information on this topic,
read Treasury Issues Notice Addressing Domestic Partnerships and S-corporations Filing under Proposed GILTI Regulations.

On August 22, the Department of the Treasury and the Internal Revenue Service (collectively, Treasury) issued Notice 2019-46, which announced Treasury’s plans to issue regulations that will permit a domestic partnership or S corporation to apply the rules in proposed §1.951A-5 for taxable years ending before June 22, 2019.  The notice also addresses the applicability of penalties in the case of a domestic partnership or S corporation that acted consistently with proposed §1.951A-5 on or before June 21, 2019, but files a tax return consistent with the final regulations under §1.951A-1(e). To apply the rules in proposed §1.951A-5 or for penalties not to apply as discussed in the notice, a domestic partnership or S corporation must satisfy certain notification and reporting requirements described in the notice.
 
The regulations described in the notice will be effective for taxable years ending before June 22, 2019.  Prior to the issuance of such regulations, domestic partnerships and S corporations may rely on the notice, provided they satisfy certain requirements. The rules in the notice are intended to provide relief from compliance burdens for certain domestic partnerships and S corporations. A more comprehensive tax alert regarding the notice is forthcoming. 
 
Please contact a BDO international tax specialist if you would like more information regarding the notice.
 

CONTACT:
 
Joe Calianno
Partner and International Tax Technical
Practice Leader, National Tax Office
  Monika Loving
Partner and International Tax Practice Leader
 

 
Brandon Boyle
Principal
  Reese Fredrickson
Partner

 
Annie Lee
Partner
  Chip Morgan
Partner

 
Robert Pedersen
Partner
  Jerry Seade
Principal

 
Natallia Shapel
Partner
  Sean Dokko
Managing Director, National Tax Office