The US IRS has released its annual “no rule” list, adding foreign base company income issues to the list of topics that the agency will “not ordinarily” address in private letter rulings or determination letters.
The guidance, Rev. Proc. 2016-7, released December 31, states that the IRS will not ordinarily address in private letter rulings issues involving “[w]hether the facts and circumstances evince that a controlled foreign corporation makes a substantial contribution through the activities of its employees to the manufacture, production, or construction of the personal property sold within the meaning of §1.954–3(a)(4)(iv).”
The decision to not rule on the foreign base company income issue was the only international tax change made to the no rule list as compared to last year’s list. The IRS also released a no rule list covering domestic issues in Rev. Proc. 2016–3.
In addition, the IRS in Rev. Proc. 2016–1, updated its procedures for issuing private letter rulings, information letters, and determination letters. The IRS also released Rev. Proc. 2016–2, outlining its procedure for issuing technical advice memorandum to a director or an appeals area director and explaining the rights that a taxpayer has when a field office requests a TAM regarding a tax matter.
The IRS also provided guidance on rulings for exempt organizations and employee plans in Rev. Proc. 2016–4, Rev. Proc. 2016–5, Proc. 2016–6, and Rev. Proc. 2016–8.
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