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Going From The Frying Pan Into The Fire? A Critique Of The U.S. Treasury’S Newly Proposed Section 987 Currency Regulations, Joseph L. Tobin
Going From The Frying Pan Into The Fire? A Critique Of The U.S. Treasury’S Newly Proposed Section 987 Currency Regulations, Joseph L. Tobin
Joseph L Tobin
In September 2006, the IRS proposed new regulations for taxation of currency gains and losses for U.S. corporations' foreign branches. The IRS has announced that it would like to finalize them as soon as possible, perhaps as early as the summer of 2008. The new regulations withdraw the old section 987 regulations of 1991. The IRS believes these new regulations are necessary in order to prevent taxpayers from taking "artificial" currency losses on assets such as land and machinery -- assets which do not vary with the exchange rate, according to the IRS. The new regulations propose to stop these …