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As part of Notice 2017-38, the Treasury noted that 105 temporary, proposed and final regs between Jan. 1 and April 21, 2017, half of which were minor or technical in nature; of the remaining 52, these are the eight that the departments thinks are the most burdensome. (For more details, see the
1. Proposed regs on defining a political subdivision
Opponents say that these are already defined enough under established law, that the regs would disrupt the status of many existing entities, and that it would be burdensome and costly for issuers to revise their organizational structures to meet the new requirements.
2. Temporary regs on certain transfers of property to REITs and RICs
Some commenters expressed concern that the REIT spinoff rules could lead to over-inclusion of gain in some cases.
3. Final regs on the participation of a person described in a summons interview
Commenters objected to allowing outside attorneys to question witnesses under oath. The Treasury said it would review the regulations as they concern the outside attorneys under contract with the IRS.
4. Proposed regs on restrictions on liquidation of an interest for estate, gift and GST taxes
Some commenters expressed concern that the proposed regs would eliminate or restrict common discounts, such as minority discounts and discounts for lack of marketability, which would result in increased valuations and transfer tax liability that would increase financial burdens. Commenters were also concerned that the proposed regulations would make valuations more difficult.
5. Temporary regs on liabilities recognized as recourse partnership liabilities
Some commenters said that the first rule would unduly limit the amount of partners’ bases in their partnership interests for disguised sale purposes, and that the bottom-dollar payment obligation rules would prevent many business transactions that were previously allowed.
6. Final and temporary regs on certain interests in corporations as stock or indebtedness
Some commenters were concerned about the financial burdens of compliance, especially with respect to more ordinary course transactions. They also asked for a longer delay in the effective date of the documentation rules.
7. Final regs on income and currency gain or loss with respect to a Section 987 qualified business unit
Some commenters said the transition rule in the final regs imposes an undue financial burden because it disregards losses calculated by the taxpayer for years before the transition but not previously recognized. They also said the method described in the final regs for calculating foreign currency gain or loss was unduly complex and costly to comply with.
8. Final regs on certain transfers of property to foreign corporations
Commenters said the regs would increase burdens by taxing transactions that were previously exempt, and said the regulations should provide an exception for transfers of foreign goodwill and going-concern value in circumstances that would not lead to an abuse of the exception.