What?! Me, Change? Proposed Regs Under 951A Adopt Aggregate Approach and Make Definite Changes to PFIC Reporting

The Treasury and IRS issued proposed regulations under I.R.C. Section 951A providing guidance on passive foreign investment companies (PFICs) and controlled foreign corporations (CFCs) held by domestic partnerships and S corporations. 87 Fed. Reg.  3,890 (Jan. 25, 2022). The proposed rules impact PFIC reporting and determine that domestic partnerships and S corporations should be treated as entities or aggregates of their partners and shareholders, respectively, for purposes of making qualified electing fund (QEF) or mark-to-market (MTM) elections, recognizing QEF inclusions or MTM amounts, or filing Forms 8621.

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  • Business Entities. Treasury releases final regulations under R.C. Section 958, requiring an aggregate approach to determine the Subpart F inclusion for a CFC owned by a domestic partnership. Treasury also released accompanying proposed regulations extending the aggregate approach to domestic partnerships that own an interest in a PFIC. T.D. 9960, 87 Fed. Reg. 3,648 (Jan. 25, 2022).
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    IRS provides procedures for individuals who are not otherwise required to file Federal income tax returns for taxable year 2021 to claim the child tax credit under I.R.C. Section 24, to claim the 2021 recovery rebate credit under I.R.C. Section 6428B, and to claim the earned income credit under I.R.C. Section 32. Rev. Proc. 2022-12.
    IRS publishes its quarterly list of U.S. individuals who have chosen to expatriate. 87 Fed. Reg. 4,106 (Jan. 26, 2022).
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