n-22-34.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Deferred Applicability Dates for Foreign Currency Guidance

Notice 2022-34

SECTION 1. PURPOSE
This Notice announces that the Department of the Treasury (“Treasury
Department”) and the Internal Revenue Service (“IRS”) intend to amend the regulations
under section 987 to defer the applicability date of the 2016 final regulations and the
related 2019 final regulations (as defined below) by one additional year.
On December 8, 2016, the Treasury Department and the IRS published Treasury
Decision 9794 (81 Fed. Reg. 88806), which contained final regulations under section
987 and amendments to existing regulations under sections 861, 985, 988, and 989.
See §§1.861-9T(g)(2)(ii)(A)(1) and (g)(2)(vi); 1.985-5; 1.987-0 through 1.987-11; 1.988-
0; 1.988-1(a)(4), (a)(10)(ii), and (i); 1.988-4(b)(2); and 1.989(a)-1(b)(2)(i), (b)(4), (d)(3),
and (d)(4) (the “2016 final regulations”) for the rules contained in Treasury Decision
9794. The same day, the Treasury Department and the IRS also published Treasury
Decision 9795 (81 Fed. Reg. 88854), which contained temporary regulations under
sections 987 and 988 (the “temporary regulations”), and concurrently published a notice
of proposed rulemaking by cross-reference to the temporary regulations (REG-128276-
12, 81 Fed. Reg. 88882) (the “proposed regulations”).
On May 13, 2019, the Treasury Department and the IRS published Treasury
Decision 9857 (84 Fed. Reg. 20790), which adopted in final form §§1.987-2T(c)(9),
1.987-4T(c)(2) and (f), and 1.987-12T and withdrew §1.987-7T. The other temporary

2
regulations expired on December 6, 2019. The proposed regulations that were not
finalized in 2019 remain outstanding.
Earlier notices deferred the applicability dates of the 2016 final regulations,
§§1.987-1T (other than §§1.987-1T(g)(2)(i)(B) and (g)(3)(i)(H)) through 1.987-4T, 1.987-
6T, 1.987-7T, 1.988-1T, and 1.988-2T(i) of the temporary regulations (the “related
temporary regulations”), and §§1.987-2(c)(9) and 1.987-4(c)(2) and (f) of the 2019 final
regulations (the “related 2019 final regulations”). Most recently, on October 25, 2021,
Notice 2021-59, 2021-43 I.R.B. 664, announced that future guidance would defer the
applicability date of the 2016 final regulations and the related 2019 final regulations by
one additional year to taxable years beginning after December 7, 2022. Regulations
deferring these applicability dates have not yet been issued.
SECTION 2. AMENDED APPLICABILITY DATE
The Treasury Department and the IRS intend to amend the applicability dates in
§§1.861-9T, 1.985-5, 1.987-11, 1.988-1, 1.988-4, and 1.989(a)-1 of the 2016 final
regulations and §§1.987-2 and 1.987-4 of the related 2019 final regulations to provide
that the 2016 final regulations and the related 2019 final regulations apply to taxable
years beginning after December 7, 2023 (the “amended applicability date”). See
§§1.861-9T(g)(2)(vi); 1.985-5(g); 1.987-2(e)(2); 1.987-4(h)(2); 1.987-11(a); 1.988-1(i);
1.988-4(b)(2)(ii); 1.989(a)-1(b)(4); 1.989(a)-1(d)(4). Thus, following the amendments
described in this Notice, the 2016 final regulations and the related 2019 final regulations
would apply to the taxable year beginning on January 1, 2024, for calendar-year
taxpayers. The Treasury Department and the IRS do not intend to amend the
applicability date of §1.987-12. See §1.987-12(j).

3
A taxpayer may choose to apply the 2016 final regulations, the related temporary
regulations (until they were revoked on May 13, 2019, or expired on December 6, 2019,
as applicable), and the related 2019 final regulations (beginning on May 13, 2019) to
taxable years beginning after December 7, 2016, and before the amended applicability
date provided the taxpayer consistently applies those regulations to such taxable years
with respect to all section 987 QBUs directly or indirectly owned by the taxpayer on the
transition date as well as all section 987 QBUs directly or indirectly owned on the
transition date by members that file a consolidated return with the taxpayer or by any
controlled foreign corporation, as defined in section 957, in which a member owns more
than 50 percent of the voting power or stock value, as determined under section 958(a)
(collectively, “related parties”). A taxpayer and its related parties are not, however,
required to apply §1.987-7T of the related temporary regulations to any part of a taxable
year ending on or after May 13, 2019. For example, a calendar-year taxpayer applying
the regulations in accordance with this paragraph is not required to apply §1.987-7T to
the period beginning on January 1, 2019 and ending on May 13, 2019 (when §1.987-7T
was revoked).
The transition date is the first day of the first taxable year to which §§1.987-1
through 1.987-10 are applicable with respect to a taxpayer under §1.987-11. Section
1.987-11(c). Therefore, if a taxpayer chooses to apply §§1.987-1 through 1.987-10 to a
taxable year beginning before the amended applicability date, the transition date is the
first day of the first taxable year in which the taxpayer chooses to apply §§1.987-1
through 1.987-10.

4
For periods following the expiration of the temporary regulations, a taxpayer may
rely on §§1.987-1 (other than §§1.987-1(g)(2)(i)(B) and (g)(3)(i)(H)), 1.987-3, 1.987-6,
1.988-1, and 1.988-2(i) of the proposed regulations, provided that the taxpayer and its
related parties consistently follow those proposed regulations in their entirety and apply
the 2016 final regulations and the related 2019 final regulations for the same taxable
year. In addition, a taxpayer may rely on §§1.987-1(g)(2)(i)(B) and (g)(3)(i)(H) and
1.987-8 of the proposed regulations, provided that the taxpayer and its related parties
consistently follow those proposed regulations in their entirety. A taxpayer may rely on
§1.987-7 or 1.988-2(b)(16) of the proposed regulations, provided that the taxpayer and
its related parties consistently follow each section of those proposed regulations on
which it relies.
SECTION 3. TAXPAYER RELIANCE
Before the regulations under section 987 are amended as described in section 2
of this Notice, taxpayers may rely on the provisions of this Notice.
SECTION 4. EFFECT ON OTHER DOCUMENTS
Notice 2021-59, 2021-43 I.R.B. 664; Notice 2020-73, 2020-41 I.R.B. 886; Notice
2019-65, 2019-52 I.R.B. 1507; Notice 2018-57, 2018-26 I.R.B. 774; and Notice 2017-
57, 2017-42 I.R.B. 325 are modified, and as so modified, are hereby superseded.
SECTION 5. DRAFTING INFORMATION
The principal author of this Notice is Jack Zhou of the Office of Associate Chief
Counsel (International). For further information regarding this Notice, contact Jack Zhou
at (202) 317-5467 (not a toll-free number).