SECTION 5. REQUEST FOR

COMMENTS AND CONTACT INFORMATION

The Treasury Department and the IRS are studying (1) potential revisions to the “all or nothing” principle, taking into account administrability concerns, and (2) whether, and, if so, how disregarded items should be taken into account for purposes of the DCL rules (for example, in a manner similar to that set forth in §1.904-4(f) for determining foreign branch category income), and request comments on these issues.

Comments should be submitted by October 21, 2025. Comments may be submitted electronically via the Federal eRulemaking Portal at www.regulations. gov (type IRS-2025-0171 in the search field on the regulations.gov homepage to find this notice and submit comments). Written comments may be submitted to the Office of Associate Chief Counsel (International), Attention: Mark Terrell, Internal Revenue Service, IR-4619, 1111 Constitution Avenue, NW, Washington, DC 20224. Comments will be available for public inspection and copying.

The author of this notice is the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in its development. For further information concerning this notice, please contact (202) 317-5443.

Bulletin No. 2025–37 387 September 8, 2025

of gain (if any) recognized by the distributing corporation; or (ii) nonrecognition treatment is provided for in regulations under section 897(e)(2).

Section 1.897-5T(c)(4)(i) provides that a foreign corporation that transfers property to another corporation in an exchange under section 361(a) for stock of a USRPHC immediately after the transfer pursuant to a reorganization under section 368(a)(1)(C), (D), or (F) must generally recognize gain under section 897(d)(1) on the distribution of the stock of the USRPHC to its shareholders under section 361(c). Consistent with section 897(d)(2), §1.897-5T(c)(4)(ii) and (iii) provide, respectively, an exception to and a limitation on this gain recognition.