SECTION 2. TREATMENT OF

CERTAIN OBLIGATIONS UNDER SECTION 956(c)

Recently, circumstances affecting liquidity have made it difficult for taxpayers to fund their operations. To facilitate liquidity in the near term, this notice announces that the Internal Revenue Service and the Treasury Department will issue regulations under section 956(e) that, for purposes of section 956, a controlled foreign corporation (within the meaning of section 957(a)) may choose to exclude from the definition of the term “obligation” an obligation held by the controlled foreign corporation that would constitute an investment in United States property provided the obligation is collected within 60 days from the time it is incurred. This

exclusion shall not apply, however, if the controlled foreign corporation holds for 180 or more calendar days during its taxable year obligations that, without regard to the 60 day rule described in the preceding sentence, would constitute an investment in United States property.

This notice does not otherwise affect the application of Notice 88–108. A controlled foreign corporation may apply this notice or Notice 88–108, but not both.