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To End Deferral As We Know It: Simplification Potential Of Check-The-Box, Reuven Avi-Yonah
To End Deferral As We Know It: Simplification Potential Of Check-The-Box, Reuven Avi-Yonah
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On December 17, 1996, the Treasury Department issued final regulations under section 7701 of the Internal Revenue Code implementing the regime dubbed "check-the-box," under which taxpayers can elect to be treated as corporations or as passthrough entities for U.S. tax purposes. The purpose of this article is to argue that the adoption of these regulations affords a momentous opportunity for Congress to achieve significant simplification of the notoriously complex U.S. international tax rules. Fundamentally, the adoption of check-the- box means that U.S. taxpayers will be able to elect whether or not their foreign-source active income will enjoy deferral from current …