SECTION 6. EFFECTIVE DATES

.01 In General

Except as otherwise provided in this section 6, the regulations described in section 4 are expected to apply to any refund year ending on or after February 8, 2016.

The guidance described in section 5 applies to requests for closing agreements filed on or after February 8, 2016.

.02 Taxpayer Reliance on Section 4

For refund years ending before the issuance of any proposed regulations or temporary regulations described in this notice, taxpayers may rely on the rules described in section 4.

February 8, 2016 310 Bulletin No. 2016–6

.03 Special Rules for Taxpayers Applying the Rules Described in Section 4 to Refund Years Ending Before February 8, 2016

The regulations described in section 4 are expected to provide that a RIC may apply the regulations to refund years ending before February 8, 2016.

The regulations also are expected to provide that, if a RIC applies the netting method described in section 4 with respect to refund years ending before February 8, 2016, then for such refund years the RIC may, as an alternative to applying the rules described in section 4.04(b):

(a) apply the rules described in section 4.04(b) by excluding from the amount included in the shareholder’s gross income under section 853(b)(2)(A) and § 1.853– 2(b) the full amount of the current year foreign taxes that are offset by the foreign tax adjustment, rather than just the amount of the current year foreign taxes that are offset by the foreign tax refund component of the foreign tax adjustment; or

(b) apply an approach that is expected to produce substantially the same U.S. Federal income tax liability that the RIC’s shareholders would have had, in the aggregate, under either section 4.04(b) or 6.03(a). An example of a possible approach under section 6.03(b) would be for the RIC to include the interest adjustment in the shareholders’ gross income, but reduce the amount of the foreign tax adjustment associated with such interest by an amount that reasonably approximates the U.S. income tax that would be collected from the RIC’s shareholders on that income. This approach would only be permissible, however, if it was expected to produce substantially the same U.S. Federal income tax liability that the RIC’s shareholders would have had, in the aggregate, under section 6.03(a).