SECTION 1. PURPOSE

The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have published Treasury Decision 10022 containing final regulations (2025 final regulations) that provide rules for characterizing digital content and cloud transactions. [T.D. 10022, 90 FR 2977 (January 14, 2025).] The 2025 final regulations apply solely to certain enumerated international provisions of the Internal Revenue Code (the Code). ¹ This notice requests comments on any potential implications if the characterization rules currently contained in §§1.861-18 and 1.861-19, as amended and added, respectively, by the 2025 final regulations, were to apply to all provisions of the Code, including the need for additional guidance, and seeks specific comments on the possible impacts and guidance that may be necessary with respect to certain identified provisions. Comments received in response to this notice will help inform the Treasury Department and the IRS’s decision regarding whether to apply the characterization rules currently contained in §§1.861-18 and 1.861-19 to all provisions of the Code and what further guidance, if any, should be issued if the regulations were revised in this manner.