In this article, Layla Asali comments on the recently released Section 367 guidance package, which provides some targeted changes to the 2008 proposed regulations’ elective exception to the section 367(a)(5) rules. According to Asali , the Section 367(a)(5) final regulations carry forward the important mechanical rules set forth in the 2008 proposed regulations and retain "a lot of the core provisions."

While Treasury and the IRS did not adopt many stakeholder comments, the final regulations do offer some refinement from the previous guidance package, Asali said, adding that she thought the government did not revisit the basic policy decisions of the proposed regulations. And while the government declined to expand the rule for deductible liabilities to include net operating losses or foreign tax credits, Asali said she understands that if government policymakers want to reduce complexity, "they have to draw the line somewhere."