• Proposed Regulations Seek to Ease Compliance with the Loss Trafficking Rules: Treasury Issues Notice of Proposed Rulemaking Limiting the Application of the Section 382 Segregation Rules in Certain Circumstances
  • December 1, 2011 | Authors: Ronald E. Creamer; Michael J. Rosenthal; S. Eric Wang
  • Law Firms: Sullivan & Cromwell LLP - New York Office ; Sullivan & Cromwell LLP - London Office
  • Under Section 382 of the Internal Revenue Code, a corporation’s use of net operating losses is limited if there is an “ownership change.” On November 22, 2011, the Department of Treasury issued a Notice of Proposed Rulemaking (the “Notice”) containing proposed regulations (the “Proposed Regulations”) intended to lessen the compliance burden on taxpayers determining whether an ownership change has occurred for these purposes. The Proposed Regulations are based upon and take into accoun tcomments received in respect of Notice 2010-49, which announced an IRS study on easing the compliance burden of tracking less-than-5% shareholders for these purposes.