Tax News

CCH (cch.taxgroup.com) reports:

Notice 88-108, 1988-2 CB 445, continues to apply to Code Sec. 956(a)(1) after its amendment by the Omnibus Budget Reconciliation Act of 1993 (P.L.103-66), and will exclude certain obligations determined on a quarterly basis. Accordingly, if a domestic corporation borrows funds from its wholly owned controlled foreign corporation (CFC) five days prior to the end of each quarter in order to pay off the outstanding balance of its revolving debt and subsequently repays the debt to the CFC within five days after the end of the quarter, such debt obligation would not constitute an investment in U.S. property under Code Sec. 956(a)(1). The requirements of Notice 88-108 are met as long as the domestic parent's debt held by the CFC at the end of each quarter is repaid within 30 days of issuance, and the total number of days outstanding that the parent's debt is held by the CFC for the taxable year is less than 60 days.
IRS Advice Memorandum AM 2007-0016
Other References:
Code Sec. 956
CCH Reference - 2007FED ¶ 28,576.35
Tax Research Consultant
CCH Reference - TRC INTLOUT: 9,256.15