June 14 2018
Foreign currency regulations further postponed
On 13 June 2018, the US Treasury Department and the US Internal Revenue Service (IRS) issued Notice 2018-57 to announce their intention to further delay the applicability date of the final regulations (TD 9794) and certain provisions in the temporary regulations (TD 9795), both of which were issued under section 987 of the US Internal Revenue Code (IRC).
IRS Notice 2017-57 was issued previously on 16 October 2017 to defer the applicability date of those regulations by 1 year.
Notice 2018-57 delays the regulations by 1 additional year. Accordingly, the regulations will apply to taxable years beginning on or after the date that is 3 years after the first day of the first taxable year following 7 December 2016.
The final regulations and the temporary regulations were published in the Federal Register on 8 December 2016 to provide guidance on income and foreign currency gain or loss with respect to a qualified business unit (QBU).
The final regulations were identified in IRS Notice 2017-38 as significant tax regulations requiring additional review for purposes of reducing tax regulatory burdens. As part of the review, the Treasury Department and the IRS are considering changes to the final regulations that would allow taxpayers to elect to apply alternative rules for transitioning to the final regulations and alternative rules for determining section 987 gain or loss.
Notice 2018-57 will appear in the IRS Internal Revenue Bulletin (IRB) as part of IRB 2018-26, dated 26 June 2018.