Notice 2005-10

Part III. Administrative, Procedural, and Miscellaneous
Domestic Reinvestment Plans
and Other Guidance Under
Section 965
Notice 2005–10
SECTION 1. OVERVIEW
This notice provides guidance concerning new section 965 of the Internal
Revenue Code (Code). It sets forth general principles and specific guidance on
domestic reinvestment plans and on investments in the United States described
in section 965(b)(4)(B). The Treasury Department and the Internal Revenue Service
(IRS) intend to issue additional notices
providing guidance concerning section
965, including rules relating to the foreign
tax credit and expense allocation, rules
for adjusting the calculation of the base
period amounts to take into account mergers, acquisitions and spin-offs, and rules
regarding controlled groups. The Treasury
Department and the IRS expect to issue
regulations that incorporate the guidance
provided in this and the subsequent notices.
The remainder of this notice is divided
into eleven sections. Section 2 provides
background information with respect to
section 965. Section 3 addresses the
meaning of the term “cash dividends.”
Section 4 sets forth general guidance
concerning domestic reinvestment plans.
Section 5 lists certain expenditures that,
if made pursuant to a domestic reinvestment plan, are investments in the United
States described in section 965(b)(4)(B)
(permitted investments). Section 6 lists
certain expenditures that are not permitted
investments. Section 7 describes how a
taxpayer elects to apply section 965 to a
taxable year. Section 8 provides guidance
on reporting requirements and on how a
taxpayer may, under the facts and circumstances, establish to the satisfaction of the
Commissioner that the dividend proceeds

are invested in the United States pursuant
to a domestic reinvestment plan, including
a safe harbor for making such a demonstration. Section 9 provides transition
rules that apply to certain taxpayers that,
prior to the issuance of this notice, either
adopted a domestic reinvestment plan and
received a dividend, or filed a tax return
for a taxable year to which section 965
applies. Section 10 provides the effective
date of this notice. Section 11 provides
information required under the Paperwork
Reduction Act of 1995. Finally, section
12 provides drafting information.
This notice provides guidance on several of the requirements for eligibility
for the deduction provided under section
965(a). Section 965 contains additional
requirements, which are briefly outlined in
section 2 of this notice but which are not
addressed in detail in this notice, that must
be satisfied in order for a cash dividend
to be eligible for the deduction provided
under section 965(a).
SECTION 2. BACKGROUND
The American Jobs Creation Act of
2004 (P.L. 108–357) (the Act), enacted on
October 22, 2004, added new section 965
to the Code. In general, and subject to limitations discussed below, section 965(a)
provides that a corporation that is a U.S.
shareholder1 of a controlled foreign corporation (CFC) may elect, for one taxable
year, an 85 percent dividends received
deduction (DRD) with respect to certain
cash dividends it receives from its CFCs.
For this purpose, all U.S. shareholders that
are members of an affiliated group filing a
consolidated return under section 1501 are
treated as one U.S. shareholder. Section
965(c)(5).
For purposes of section 965, the term
“dividends” includes cash amounts included in gross income as dividends under
sections 302 and 304, but does not include
amounts treated as dividends under section 78 or 1248 or, in certain cases, section

367.2 H.R. Conf. Rep. No. 108–755, at
314–15. For this purpose a cash dividend
also includes a cash distribution from a
CFC that is excluded from gross income
under section 959(a) to the extent of inclusions under section 951(a)(1)(A) as a
result of a cash dividend during the election year to: (1) such CFC from another
CFC in a section 958(a) chain of ownership; or (2) any other CFC in such chain
of ownership to the extent of cash distributions described in section 959(b) made
during such year to the CFC from which
such U.S. shareholder received such distribution.
The DRD under section 965(a) is subject to several limitations. First, section
965(b)(1) limits the amount of dividends
eligible for the deduction to the greatest
of the following three amounts: (1) $500
million; (2) the amount shown on the taxpayer’s applicable financial statement3 as
earnings permanently reinvested outside
the United States; or (3) in the case of
an applicable financial statement that does
not show a specific amount of earnings
permanently reinvested outside the United
States and that shows a specific amount
of tax liability attributable to such earnings, the amount of such liability divided
by 0.35.
Second, section 965(b)(2) limits the
amount of dividends eligible for the deduction to the excess (if any) of the dividends received during the taxable year by
the U.S. shareholder from CFCs over the
annual average for the base period years
of: (1) the dividends received during each
base period year by such shareholder from
CFCs; (2) the amounts includible in such
shareholder’s gross income for each base
period year under section 951(a)(1)(B)
with respect to CFCs; and (3) the amounts
that would have been included for each
base period year but for section 959(a)
with respect to CFCs. The base period
years are the three taxable years which
are among the five most recent taxable

1

The term U.S. shareholder means, with respect to any foreign corporation, a U.S. person who owns (within the meaning of section 958(a)), or is considered as owning by applying the rules
of ownership of section 958(b), 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation. Section 951(b).

2

Dividends resulting from liquidations qualifying under section 332 to which section 367(b) applies qualify as cash dividends to the extent the U.S. shareholder receives cash as part of the
liquidation. Section 965(c)(3). A deemed liquidation effectuated through an election under §301.7701–3(c), however, does not result in an actual distribution of cash as required under section
965. See H.R. Conf. Rep. No. 108–755, at 315, footnote 108.

3 The term “applicable financial statement” means the most recently audited financial statement which is certified on or before June 30, 2003, as being prepared in accordance with generally
accepted accounting principles, which is used for the purposes of a statement or report to creditors or shareholders or for any other substantial nontax purpose, and, if the taxpayer is required
to file with the SEC, is so filed on or before June 30, 2003. Section 965(c)(1).

2005–6 I.R.B.

474

February 7, 2005

years ending on or before June 30, 2003,
determined by disregarding the year for
which such total amount is highest and the
year for which such total amount is lowest
among such five years. Section 965(c)(2).
Third, section 965(b)(3) provides that
the amount of dividends eligible for the deduction is reduced by any increase in related-party indebtedness of the CFC between October 3, 2004, and the close of the
election year. For this purpose, all CFCs
with respect to which the taxpayer is a U.S.
shareholder are treated as a single CFC.
Finally, section 965(b)(4) provides that
the amount of the dividend must be invested in the United States pursuant to
a domestic reinvestment plan that is approved by the taxpayer’s president, chief
executive officer, or comparable official
before the payment of the dividend, and
that is subsequently approved by the taxpayer’s board of directors, management
committee, executive committee, or similar body. The domestic reinvestment plan
must provide for the investment of the dividend in the United States (other than as
a payment for executive compensation),
including as a source for the funding of
worker hiring and training, infrastructure,
research and development, capital investments, or the financial stabilization of the
corporation for the purposes of job retention or creation. This list is not intended
to be exclusive. H.R. Conf. Rep. No.
108–755, at 316.
Section 965(c) provides definitions and
special rules, including rules for adjusting
the calculation of the base period amounts
to take into account mergers, acquisitions
and spin-offs. Sections 965(d) and (e) provide special rules limiting foreign tax credits and expense deductions and limiting
the attributes available to offset the nondeductible portion of dividends, respectively.
Section 965(f) provides that taxpayers
may elect the application of section 965
for either the taxpayer’s last taxable year
which begins before October 22, 2004, or
the taxpayer’s first taxable year which begins during the one-year period beginning
on October 22, 2004.

4

SECTION 3. CASH DIVIDENDS
.01 In General
The DRD under section 965(a) applies
only to cash dividends4 received by a corporate U.S. shareholder from CFCs with
respect to which it is a U.S. shareholder.
For this purpose, the term “cash” includes
both U.S. dollars and foreign currency. A
CFC may effect distributions of cash by
wire transfer or check.
The Treasury Department and the IRS
anticipate that, in some cases, a CFC will
liquidate investments in cash equivalents
in order to pay a cash dividend as required
under section 965. It is also anticipated
that the U.S. shareholder that receives such
a cash dividend from the CFC may temporarily invest all or a portion of the dividend proceeds in cash equivalents, which
may be similar in nature to those that had
been held by the CFC. For purposes of section 965, the mere fact that the CFC held
cash equivalents prior to the payment of
a cash dividend and the U.S. shareholder
holds cash equivalents after the payment
of such dividend will not itself cause the
Commissioner to recharacterize the dividend as a distribution by the CFC of the
cash equivalents (rather than as a required
distribution of cash), under the step transaction doctrine, or other similar authorities. For purposes of this paragraph, the
term “cash equivalents” has the meaning
provided in §1.897–7T(a).
.02 Treatment of Distributions to
Intermediary Pass-Through Entities
To qualify as a cash dividend within
the meaning of section 965, cash must be
distributed from a CFC to the U.S. shareholder in the taxable year for which an
election under section 965 applies. For
purposes of section 965(a), a cash dividend paid by a CFC to a pass-through entity (a partnership or disregarded entity)
that is owned by a U.S. shareholder shall
be treated as received by such U.S. shareholder only if and to the extent that such
shareholder receives cash in the amount of
the CFC dividend during the taxable year
for which such election is in effect. In
addition, in the case of a partnership, a
cash dividend is treated as received by a
U.S. shareholder that is a partner in such

partnership only if the amount of the dividend is: (i) allocated to the U.S. shareholder-partner under the rules of sections
702 and 704 and the regulations thereunder; and (ii) separately stated to the partner
under §1.702–1(a)(8)(ii).
For example, if a U.S. shareholder owns
a disregarded entity that, in turn, owns a
CFC that pays a cash dividend to the disregarded entity, such dividend will qualify as a cash dividend received by the U.S.
shareholder within the meaning of section
965 only to the extent the disregarded entity distributes cash in the amount of the
dividend proceeds to the U.S. shareholder
during the taxable year to which an election under section 965 applies. A loan of
cash from the disregarded entity to the U.S.
shareholder would not be considered a distribution of cash for this purpose because,
even though the loan would not otherwise
be regarded for tax purposes, there would
be a legal obligation for the U.S. shareholder to repay the cash to the disregarded
entity.
.03 Amount of Cash Dividend Not Reduced
by Related Deductions or Expenses
The amount otherwise qualifying as a
cash dividend is not reduced by expenses
or deductions of the taxpayer related to
such cash dividend, including any foreign
withholding tax and U.S. federal, state or
local income tax imposed thereon. Taxpayers must invest the gross amount of the
dividend (not reduced by expenses or deductions related to such dividend) in order
for the total cash dividend to qualify under section 965(b)(4). Thus, for example,
if a CFC distributes $100x of cash to its
U.S. shareholder with respect to its stock
that is treated as a dividend, and such distribution is subject to a foreign withholding tax of $5x (such that the U.S. shareholder receives a net amount of $95x), the
amount of the cash dividend is $100x. Accordingly, the taxpayer must invest $100x
in the United States pursuant to a domestic
reinvestment plan in order for the $100x
cash dividend to satisfy the requirements
of section 965(b)(4).
.04 Interaction with Section 959
Except as provided in section 965(a)(2),
the term “dividends” does not include

For purposes of section 965, a cash dividend includes cash amounts treated as a dividend pursuant to section 356(a)(2).

February 7, 2005

475

2005–6 I.R.B.

amounts that are not included in gross income pursuant to section 959(a). In other
words, distributions by a CFC to its U.S.
shareholder with respect to its stock out of
its earnings and profits described in section 959(c)(1) and (c)(2) do not qualify as
dividends (except to the extent provided in
section 965(a)(2)). Thus, for example, if
a CFC has earnings and profits described
in section 959(c)(1) of 100u and earnings
and profits described in section 959(c)(3)
of 50u, under the ordering rules of section
959(c) the CFC must distribute 150u to its
U.S. shareholder with respect to its stock
in order to be considered to have paid a
50u dividend within the meaning of section 965.

and no special meeting of the board or
other body is required to grant this approval. Where the U.S. shareholder of a
CFC is a member of a consolidated group
within the meaning of §1.1502–1(h), the
domestic reinvestment plan must be approved by the president, chief executive
officer, or comparable official, and by
the board of directors, management committee, executive committee, or similar
body, of the common parent of the consolidated group. In such a case, the domestic
reinvestment plan need not be separately
approved by other members of the consolidated group, even if such members make
permitted investments pursuant to such
plan.

SECTION 4. DOMESTIC
REINVESTMENT PLANS

.03 Specificity

.01 In General
A domestic reinvestment plan is a
written plan prepared by the taxpayer
that describes the planned investment in
the United States of the amount of the
dividend otherwise qualifying for the deduction under section 965(a) in reasonable
detail and specificity. It may encompass
more than one cash dividend from one
or more CFCs. A taxpayer may adopt
separate domestic reinvestment plans to
apply to different cash dividends made
during the taxable year to which it elects
to apply section 965. Under section 965,
amounts invested in the United States pursuant to the domestic reinvestment plan
are not required to exceed investments
made in prior years or investments that
were planned by the taxpayer prior to the
enactment of section 965.
.02 Procedural Requirements
Pursuant to section 965(b)(4)(A), a
domestic reinvestment plan must be approved by the taxpayer’s president, chief
executive officer, or an official exercising
comparable authority over the taxpayer before the cash dividend to which it relates
is paid. The taxpayer’s board of directors, management committee, executive
committee, or the body which exercises
similar authority over the taxpayer must
subsequently approve the domestic reinvestment plan. Such approval may be
granted after the payment of the dividend
subject to the domestic reinvestment plan,

2005–6 I.R.B.

The domestic reinvestment plan must
describe specific anticipated investments
in the United States. The Treasury Department and the IRS do not intend to provide a
template for a domestic reinvestment plan.
The composition of a taxpayer’s domestic
reinvestment plan may vary depending on
the type of permitted investments contemplated by the plan (for example, research
and development or capital improvements
to plant and facility), the time period over
which permitted investments will be made,
and whether factors beyond the taxpayer’s
control could affect its ability to make the
contemplated investment. These and other
relevant facts and circumstances should be
taken into account in applying the reasonable specificity standard set forth in this
notice.
In general, the domestic reinvestment
plan must provide sufficient detail to enable the taxpayer to demonstrate upon examination that the expenditures that subsequently occur were of the kind that were in
fact contemplated at the time of the adoption of such plan. Thus, a domestic reinvestment plan that merely recites the statutory language without further detail, or that
merely refers generically to expenditures
on whatever uses may be permitted for
purposes of section 965, will not be considered to have met the statutory requirements.
The domestic reinvestment plan need
not indicate precise dollar amounts expected to be incurred for each specific
component of an investment, but must
state the total dollar amount that will be

476

invested for each respective principal investment in the United States pursuant
to such plan (e.g., a total dollar amount
for expenditures for research and development on product lines A, B and C and
a total dollar amount for expenditures
for advertising for brands D and E). A
taxpayer may shift expenditures between
investments specified in the plan without
amending the plan and, to that extent, the
additional amounts spent on one investment would be considered an alternative
investment (as described below). For
example, if a $100x dividend reinvestment plan calls for expenditures of $30x
on research and development and $70x
on advertising, and the taxpayer in fact
expends $90x on the advertising, the additional $20x expenditures on advertising is
an alternative investment.
The domestic reinvestment plan must
state a reasonable time period, taking into
account the nature of the investments to
be made in the United States and other
facts and circumstances, during which the
taxpayer anticipates completing all such
investments pursuant to such plan.
The Treasury Department and the IRS
recognize that, after a domestic reinvestment plan is approved, certain investments
specified in such plan may no longer be
practicable or desirable for various reasons. This may occur, for example, if
an investment is dependent on actions
of other persons, or upon reasonably
anticipated business conditions that subsequently change. For example, a taxpayer’s
domestic reinvestment plan may contemplate as a principal investment a plant
in the United States the construction of
which cannot proceed absent certain governmental approvals and, subsequent to the
adoption of the plan, the necessary governmental approvals are denied. Accordingly,
the domestic reinvestment plan may provide alternative investments, which are
themselves permitted investments, for
investing the amount of the dividend in
the United States in cases where principal
investments are subsequently delayed or
rejected. Such alternative investments
must be described in the domestic reinvestment plan under the same standard of
specificity provided above. The domestic
reinvestment plan need not, however, set
forth the conditions under which the alternative investments will be substituted for
the principal investments.

February 7, 2005

.04 Amending the Domestic Reinvestment
Plan
In general, the taxpayer is not permitted
to modify or amend a domestic reinvestment plan after payment of the dividend to
which such plan relates. See section 9.02
of this notice for a special transition rule in
the case of certain dividends paid prior to
January 13, 2005.
.05 Tracing or Segregating Funds
A taxpayer is not required to trace or
segregate the specific dividend proceeds it
receives to demonstrate that it has properly invested the amount of the dividend in
the United States pursuant to the domestic
reinvestment plan. Moreover, provided a
sufficient amount of funds is properly invested in the United States pursuant to the
domestic reinvestment plan (and such plan
otherwise satisfies the requirements under
section 965(b)(4) and this notice), the fact
that other non-permitted investments are
made during the period covered by such
plan generally will not affect the eligibility of the dividend under section 965.
For example, if, pursuant to a domestic reinvestment plan, a taxpayer plans to
invest an amount equal to the dividend in
infrastructure over a three-year period, the
taxpayer is not required to trace or otherwise account for the specific funds that
were distributed to the taxpayer and ensure
that the same specific funds are invested in
the infrastructure over the three-year period. Rather, the taxpayer must demonstrate to the satisfaction of the Commissioner that an amount equal to the dividend
is invested in infrastructure pursuant to the
domestic reinvestment plan.
In certain cases, however, the fulfillment of a domestic reinvestment plan may
be subject to greater scrutiny by the Commissioner because the plan provides that
the investment in the United States will
only occur over the course of many years,
and during such period the taxpayer also
is making expenditures that would not be
permitted investments. In that case, a segregated account in the amount of the dividend proceeds, with disbursements from
the account expended for the permitted investments described in the domestic reinvestment plan, would be a positive fac-

tor in establishing that the requirements of
section 965(b)(4) are satisfied.
A domestic reinvestment plan may include an investment that, prior to the adoption of the plan, was anticipated to be made
by the taxpayer. This is the case even if,
prior to the adoption of the domestic reinvestment plan, such investment was budgeted and expected to be made with other
funds.

vestments pursuant to section 4 of this notice (and the dividend otherwise qualifies
for the DRD under section 965(a)), but the
U.S. shareholder in fact only makes $90x
of the permitted investments provided for
under the plan. In such a case, $10x of the
$100x cash dividend does not qualify for
the DRD under section 965(a); the remaining $90x qualifies for the DRD under section 965(a).

.06 Expenditures in Taxable Year of
Election

SECTION 5. EXPENDITURES THAT
ARE INVESTMENTS IN THE UNITED
STATES PURSUANT TO SECTION
965(b)(4)

In general, expenditures made during
the taxable year for which the taxpayer
elects to apply section 965 may be considered to be made pursuant to the domestic
reinvestment plan, regardless of when
they are made during such year. Thus,
for example, expenditures on permitted
investments made in the election year but
prior to the payment of the cash dividend
described in section 965(a) (or prior to
the adoption of the domestic reinvestment
plan) may qualify as permitted investments made pursuant to the domestic
reinvestment plan. Expenditures made
during taxable years prior to the taxable
year to which the taxpayer elected section
965 to apply, however, will not qualify as
permitted investments made pursuant to
the domestic reinvestment plan.
.07 Partially Completed Domestic
Reinvestment Plans
A cash dividend that would otherwise
qualify for the DRD under section 965(a)
is considered to qualify pursuant to section
965(b)(4) only to the extent the amount of
the dividend is expended on permitted investments pursuant to the domestic reinvestment plan. If the domestic reinvestment plan provides for expenditures on
permitted investments of the full amount
of the dividend, but the U.S. shareholder
in fact expends less than the full amount
of the dividend on such permitted investments, the dividend satisfies the requirements of section 965(b)(4) only to the extent of the amount so expended. Thus, for
example, assume a CFC pays a cash dividend of $100x to its U.S. shareholder pursuant to a domestic reinvestment plan that
properly specifies $100x of permitted in-

.01 In General
(a) Scope. Except as provided in sections 5.01(b) and (c) of this notice, expenditures described in section 5 of this notice
that are made pursuant to a domestic reinvestment plan, as provided under section
965(b)(4) and this notice, are permitted investments. Because this list of permitted
investments is not an exclusive list, other
investments in the United States made pursuant to a domestic reinvestment plan may
also be permitted investments.
(b) Payments to Unrelated Persons.
Expenditures described in this section 5
are permitted investments only if they are
made to a person that is not related to the
taxpayer (within the meaning of section
267(b), other than section 267(b)(8) in the
case of an expenditure with respect to a
qualified plan pursuant to section 5.02 or
5.05(b)).
(c) Cash Payments. In general, permitted investments must be made in the form
of cash. If a taxpayer issues a note in payment for what would otherwise be a permitted investment, the permitted investment is considered to be made only as the
taxpayer satisfies its obligation under the
note in cash.
Stock may not be used to make permitted investments. Thus, for example, if a
taxpayer issues stock to acquire a target
corporation, such acquisition is not a permitted investment (unless, and only to the
extent that, cash also is paid for the target
company).5 Similarly, compensation in the
form of stock grants or stock options is not
a permitted investment.

5

This is the case even if the acquisition of the target would qualify, in whole or in part, as a permitted investment under section 5.06 of this notice if cash, rather than taxpayer stock, were
used to make the acquisition.

February 7, 2005

477

2005–6 I.R.B.

.02 Funding of Worker Hiring, Training,
and Other Compensation
Expenditures incurred in connection
with the funding of worker hiring and
training (other than as provided in section
6.02 of this notice) are permitted investments. In general, the funding of worker
hiring and training includes expenditures
incurred in connection with hiring new
workers and training both existing and
newly-hired workers and expenditures
incurred on compensation and benefits
(including the funding of a qualified plan
within the meaning of section 401(a)) of
existing and newly-hired workers.
Expenditures do not qualify, however, to the extent described in section
6.02 of this notice, related to executive
compensation. In addition, expenditures
qualify only to the extent attributable to
services performed by the workers within
the United States. If the services are performed partly within and partly without
the United States, the amount of permitted
investments shall be determined under
the principles of §1.861–4(b)(1). Expenditures in this case may be permitted
investments even if the workers are not
employees of the taxpayer, provided such
expenditures are borne by the taxpayer and
the activities are performed in the United
States.
In the case of funding a qualified plan,
a taxpayer may use a reasonable method
to apportion the funding between amounts
related to executive compensation and
non-executive compensation, and between
amounts related to services performed
within and without the United States. See
also section 5.05(b) of this notice (relating to the qualification of satisfaction of
an obligation to fund a qualified plan as
financial stabilization for the purposes
of job retention or creation in the United
States).
.03 Infrastructure and Capital Investments
Expenditures incurred in connection
with the funding of infrastructure and
capital investments are permitted investments. Expenditures for infrastructure
and capital investments include physical
installations and facilities that support
the taxpayer’s business, and other assets
integral to the conduct of a business, provided that the infrastructure and capital

2005–6 I.R.B.

investments are located and used in the
United States. Such expenditures also
include payments for services performed
in the United States that are related to, or
provided in connection with, otherwise
qualified infrastructure or capital investments described in this section.
Infrastructure and capital investments
include plant, property and equipment,
communications and distribution systems, computer hardware and software,
databases, and supporting equipment. Improvements to the items described above
also are qualified expenditures.
Expenditures are incurred for infrastructure and capital investments as described above regardless of whether incurred to construct, develop, purchase,
rent, or license such items.
If the infrastructure or capital investment is partly within and partly without the
United States, the amount of the expenditure that constitutes a permitted investment with respect to such item is limited
to amounts attributable to assets that are
located and used within the United States.
Similarly, if services related to, or provided in connection with, qualified infrastructure or capital investments are performed partly within and partly without the
United States, the amount of the expenditure that constitutes a permitted investment
shall be determined under the principles of
§1.861–4(b)(1).
.04 Research and Development
Expenditures incurred in connection
with the funding of research and development are permitted investments. In
general, expenditures for research and
development are expenditures that are
described in §1.174–2, provided that the
research and development activities are
performed in the United States. In addition, if the research and development is
performed partly within and partly without the United States, the amount of the
expenditure that constitutes a permitted
investment shall be determined under the
principles of §1.861–4(b)(1).
Expenditures for research and development constitute a permitted investment
only to the extent they are borne by the
taxpayer. Thus, for example, expenditures incurred on research and development performed by employees of the taxpayer within the United States are not per-

478

mitted investments to the extent the taxpayer is reimbursed by another party for
such activities pursuant to a cost sharing
arrangement under §1.482–7.
Expenditures for research and development may be permitted investments even
if the research and development is not performed by employees of the taxpayer, provided such expenditures are borne by the
taxpayer and the activities are performed
in the United States.
.05 Financial Stabilization of the
Corporation for the Purposes of Job
Retention or Creation
(a) Repayment of debt. The repayment by the taxpayer of debt, regardless
of whether the lender or holder is a U.S.
person, is a permitted investment so long
as the repayment contributes to the financial stabilization of the taxpayer for
the purposes of job retention or creation
in the United States. The repayment of
debt ordinarily will be considered to contribute to the financial stabilization of
the taxpayer because it improves the taxpayer’s debt-equity ratio and reduces the
taxpayer’s obligations for debt service.
An increase in the taxpayer’s credit rating
due to the debt repayment is not required.
Such an increase, however, would be an
indication of a contribution to financial
stabilization. The requirement that financial stabilization be for the purposes
of job retention or creation in the United
States is satisfied if, at the time the domestic reinvestment plan is approved by the
taxpayer’s president, chief executive officer, or comparable official, the taxpayer’s
reasonable business judgment is that the
resulting financial stabilization will be a
positive factor in its ability to retain and
create jobs in the United States. In this regard, a plan developed by the taxpayer as
part of its strategic planning process that
evidences expected use of savings attributable to reduced debt service principally for
expenditures incurred in connection with
permitted investments is one method of
demonstrating a purpose of job retention
or creation in the United States because
such expenditures likely would have direct
or indirect positive effects on employment
in the United States.
A repayment of debt is not a permitted investment to the extent, at the time of
the repayment, the taxpayer has a plan or

February 7, 2005

intent to incur additional debt on substantially the same terms following the date of
the dividend, and the taxpayer in fact incurs such additional debt. In that case, the
additional debt, in effect, replaces the repaid debt. Such a temporary or transitory
reduction in taxpayer indebtedness is not a
permitted investment. The determination
of whether the taxpayer had such a plan
or intent shall be determined based on all
the relevant facts and circumstances, taking into account all relevant provisions and
general principles of tax law, including the
substance over form doctrine. See, e.g.,
Rev. Rul. 89–73, 1989–1 C.B. 258.
The taxpayer is not required to demonstrate that there has been a net global reduction in indebtedness of the taxpayer’s
corporate group in order for the repayment
of debt to be a permitted investment. Thus,
for example, if a CFC incurs debt (and is
treated as the obligor on such debt) to fund
a cash dividend it pays to its U.S. shareholder, and the U.S. shareholder uses the
dividend proceeds to repay debt owed to
an unrelated party, the U.S. shareholder
may be able to demonstrate that such repayment is a permitted investment even
though the total debt of the taxpayer and
its CFCs, taken in the aggregate, is not
reduced. If, however, the facts and circumstances are such that, in substance,
the taxpayer (rather than the CFC) is the
obligor of the debt nominally incurred by
the CFC,6 then the taxpayer simply incurred debt to repay other debt. In such a
case, the repayment of the existing debt is
transitory and not a permitted investment.
The repayment or acquisition of an
intercompany obligation between members of the same consolidated group does
not qualify as the repayment of debt for
purposes of this section. However, if
the consolidated group member receiving
funds equal to the repayment or acquisition amount also makes a permitted
investment of such amount, such investment may qualify under section 5 of this
notice. See section 6.03 of this notice.
(b) Qualified Plan Funding. The satisfaction of an obligation to fund a qualified plan (within the meaning of section
401(a)) ordinarily will contribute to the financial stabilization of the taxpayer. The
taxpayer is not required to demonstrate the

6

extent to which the plan covers current employees or the extent to which those covered by the plan perform (or performed)
services within the United States. The
requirement that financial stabilization be
for the purposes of job retention or creation
in the United States is satisfied if, at the
time the domestic reinvestment plan is approved by the taxpayer’s president, chief
executive officer, or comparable official,
the taxpayer’s reasonable business judgment is that the resulting financial stabilization will be a positive factor in its ability to retain and create jobs in the United
States. See also section 5.02 of this notice
(relating to the qualification of expenditures for worker hiring, training and other
compensation in the United States as permitted investments).
(c) Other Expenditures. Expenditures
other than those described in sections
5.05(a) or (b) of this notice also are permitted investments if such expenditures
contribute to the financial stabilization
of the taxpayer for the purposes of job
retention or creation in the United States.
Whether such an expenditure contributes
to the financial stabilization of the taxpayer for the purposes of job retention
or creation in the United States will be
determined based on all the facts and
circumstances. Such an expenditure generally will be considered to be a permitted
investment if the expenditure reduces financial constraints on the taxpayer’s U.S.
operations and if, at the time the domestic reinvestment plan is approved by the
taxpayer’s president, chief executive officer, or comparable official, the taxpayer’s
reasonable business judgment is that such
reduction in financial constraints will be
a positive factor in its ability to retain and
create jobs in the United States.
.06 Acquisitions of Interests in Business
Entities
(a) General Rule. Except as provided in
section 5.06(b) of this notice, the acquisition of an ownership interest in a business
entity (such as a corporation or a partnership), regardless of whether such entity is
domestic or foreign, is a permitted investment to the extent of the percentage of the
total value of the assets owned (directly or

indirectly) by the business entity that, if
acquired directly, would be permitted investments as described in this notice. The
direct or indirect acquisition of an interest in a business entity is a permitted investment only if the taxpayer directly or
indirectly owns an interest representing at
least 10 percent of the value of such business entity after the acquisition. For purposes of determining whether a taxpayer
indirectly owns a 10-percent interest in a
business entity, and for purposes of determining whether business entities indirectly
own interests in other entities, rules similar
to the rules of section 267(c) shall apply.
In general, amounts expended to acquire a direct interest in a business entity
shall be allocated between permitted and
non-permitted investments on the basis of
the relative values of the business entity’s
assets that, if acquired directly, would be
permitted or non-permitted investments. If
a business entity owns an interest in another business entity in which the taxpayer
indirectly owns a 10-percent interest, the
assets taken into account for this purpose
are the upper-tier entity’s share of the assets held by the lower-tier entity, not the
upper-tier entity’s interest in the lower-tier
entity. In valuing assets for this purpose,
the taxpayer must use the same methodology under §1.861–9T(g) (i.e., tax book
value, alternative tax book value or fair
market value) that the taxpayer uses for
purposes of allocating and apportioning
interest expense for the taxable year under section 864(e). In applying this section 5.06, however, asset amounts shall be
characterized as permitted or non-permitted investments based on whether the assets are located and used within the United
States, and not on the basis of the source of
the income generated by the assets.
(b) De Minimis Rule . If a taxpayer acquires an interest in a business entity as
described in section 5.06(a) of this notice,
and more than 95 percent of such expenditure would be a permitted investment or
a non-permitted investment as determined
under section 5.06(a) of this notice, the entire acquisition shall be treated as a permitted investment or a non-permitted investment, respectively.

th

See, e.g., Plantation Patterns v. Comm’r, 462 F.2d 712 (5 Cir. 1972), cert. denied, 409 U.S. 1076 (1972).

February 7, 2005

479

2005–6 I.R.B.

.07 Advertising and Marketing
Expenditures
Expenditures incurred on advertising
or marketing with respect to trademarks,
trade names, brand names, or similar intangible property are permitted investments,
provided the advertising or marketing activities are performed in the United States.
If the advertising or marketing activities
are performed partly within and partly
without the United States, the amount
that constitutes a permitted investment
shall be determined under the principles
of §1.861–4(b)(1). As is the case with
research and development (discussed in
section 5.04 of this notice), the advertising
or marketing expenditures must be borne
by the taxpayer, but the advertising or marketing activities need not be performed by
employees of the taxpayer.
.08 Intangible Property
Expenditures to acquire the rights to intangible property, through purchase or license, are permitted investments to the extent the rights to the intangible property are
used in the United States.
SECTION 6. EXPENDITURES THAT
ARE NOT INVESTMENTS IN THE
UNITED STATES PURSUANT TO
SECTION 965(b)(4)
.01 In General
The expenditures described in this section 6 are not permitted investments by
the taxpayer in the United States within
the meaning of section 965(b)(4). Section
965(b)(4) explicitly provides that executive compensation is not a permitted investment. The other non-permitted investments listed in this section are not reasonably expected to maintain or add to the
value of the taxpayer as a going concern.
Because this list of non-permitted investments is not an exclusive list, other expenditures may also be non-permitted investments.
.02 Executive Compensation
Executive compensation is not a permitted investment. Executive compensation is defined as compensation paid, directly or indirectly, by or on behalf of,
the taxpayer, to any employee or former
employee, in exchange for services (past,

2005–6 I.R.B.

present, or future) performed for the taxpayer, if: (a) the individual is an employee
who is subject to the requirements of section 16(a) of the Securities Exchange Act
of 1934 with respect to the taxpayer; (b)
the individual is an employee who would
be subject to such requirements if the taxpayer were an issuer of equity securities
referred to in such section; or (c) the individual is a former employee who was described in clauses (a) or (b) of this section
6.02 at the time of his or her severance
from employment. A taxpayer may treat
the ten employees who received the highest wages in the most recently ended calendar year as being the individuals described
in clause (b) of this section 6.02.
.03 Intercompany Distributions,
Obligations, and Transactions
For purposes of section 965, all U.S.
shareholders that are members of an affiliated group filing a consolidated return
under section 1501 are treated as one U.S.
shareholder. Section 965(c)(5). Therefore, intercompany distributions, intercompany obligations, and intercompany
transactions (all as defined in §1.1502–13)
between corporations that are members
of the same consolidated group are disregarded for purposes of section 965 and
cannot be permitted investments under
section 5 of this notice. However, if a
consolidated group member initially receives a cash dividend from its CFC, an
investment of an amount equal to such
dividend amount made by another consolidated group member may be a permitted
investment under section 5 of this notice.
.04 Dividends and Other Distributions
With Respect to Stock
Dividends and other distributions made
by the taxpayer to its shareholders with
respect to its stock, without regard to how
such distributions are treated under section
301, are not permitted investments because
they do not constitute investments by the
taxpayer for purposes of section 965.
Moreover, although intercompany distributions between members of a consolidated group are disregarded for purposes
of section 965, a distribution with respect
to the stock of a consolidated group member that is held by a person that is not a
member of the same consolidated group is
not a permitted investment.

480

.05 Stock Redemptions
The redemption of outstanding stock of
a taxpayer or, through one or more steps
as part of a plan, of a corporation related
to the taxpayer (within the meaning of
section 267(b)) without regard to whether
such redemption is treated as an exchange
in part or full payment for the stock under section 302(b), is not a permitted investment. As is the case with dividends,
such expenditures do not constitute investments by the taxpayer for purposes of section 965.
Moreover, although an intercompany
transaction in which a consolidated group
member acquires its own stock from another consolidated group member is disregarded for purposes of section 965, a redemption of shares of stock of a consolidated group member that are held by a person that is not a member of the same consolidated group is not a permitted investment.
.06 Portfolio Investments in Business
Entities
Except as provided in section 5.06 of
this notice, the acquisition of an interest in
a business entity is not a permitted investment.
.07 Debt Instruments or other Evidences
of Indebtedness
The acquisition of a debt instrument or
other evidence of indebtedness, including
an acquisition of such instrument or indebtedness from the debtor, is not a permitted investment.
.08 Tax Payments
Payments of federal, state, local or
foreign taxes, and associated interest and
penalties, including foreign withholding
tax and U.S. federal, state or local income
tax imposed on distributions that qualify
as cash dividends under section 965(a),
are not permitted investments.
SECTION 7. ELECTION TO APPLY
SECTION 965 TO A TAXABLE YEAR
In general, a taxpayer elects to apply
section 965 to a taxable year by filing Form
8895 with its timely-filed tax return (including extensions) for such taxable year.
If, however, a taxpayer files its tax return

February 7, 2005

for the taxable year to which the taxpayer
intends to elect section 965 to apply prior
to the issuance of Form 8895, the election
must be made on a statement that is attached to its timely-filed tax return (including extensions) for such taxable year. See
section 9.03 for a special transition rule for
certain tax returns filed prior to January 13,
2005.
SECTION 8. REPORTING AND OTHER
ADMINISTRATIVE REQUIREMENTS
.01 In General
The determination of whether the dividend has been invested in the United States
pursuant to the domestic reinvestment plan
as provided under section 965(b)(4) is generally made under the facts and circumstances of the particular taxpayer, as described in section 8.04 of this notice. However, section 8.03 of this notice provides a
safe harbor method under which the taxpayer will be considered to have established to the satisfaction of the Commissioner that the amount of the dividend has
been invested in the United States pursuant
to the domestic reinvestment plan.
Section 8.02 of this notice sets forth reporting and documentation requirements
with respect to section 965.
.02 Reporting and Documentation
Requirements
(a) Annual Reporting. The taxpayer
shall attach a statement which includes the
items described below to its timely-filed
tax return (including extensions) for the
taxable year to which the taxpayer’s election under section 965 applies and for each
subsequent taxable year at the beginning
of which the taxpayer has not made all investments required to be made under one
or more of its domestic reinvestment plans
(unless the annual reporting requirement
is terminated earlier pursuant to sections
8.03(c)(i) or 8.04(c)(ii) of this notice):
(i) A statement that the document is
submitted pursuant to section 965(b)(4)
and this notice.
(ii) A general description of any permitted investment made during the taxable
year pursuant to the domestic reinvestment
plan and a reconciliation over the entire
term of such plan through the last day of
the taxable year for which the statement
is filed of the specific expenditures made

February 7, 2005

with respect to each such investment. The
description must include a calculation of
the percentage of completion of the domestic reinvestment plan. The percentage of completion of the plan is calculated as the sum of the expenditures made
and amounts subject to a binding contract
or commitment (as described in section
8.03(b)(i) of this notice) through such last
day, divided by the total amount to be invested pursuant to the plan.
(iii) A statement indicating whether
any of the permitted investments that have
been made pursuant to the domestic reinvestment plan are alternative investments.
(iv) Such additional items, as applicable, pursuant to sections 8.03 and 8.04 of
this notice.
(b) Documentation and Production.
The taxpayer shall, with respect to each of
its domestic reinvestment plans, prepare,
maintain, and, upon a request by the Commissioner, make available within 30 days
of such request, the following:
(i) Records that display in reasonable detail the amount invested in the
United States pursuant to the domestic
reinvestment plan as required under section 965(b)(4)(B). The documentation
must also include an allocation between
permitted investments and non-permitted
investments and, as relevant, a demonstration that the methodology used is
consistent with the principles prescribed
in this notice. For example, if the taxpayer
acquires a 10-percent interest in a business entity that directly or indirectly owns
assets that, if acquired directly, would consist of both permitted and non-permitted
investments, an analysis of the allocation
of the expenditure between permitted and
non-permitted assets under the principles
described in section 5.06 of this notice is
required.
(ii) A copy of the domestic reinvestment plan and any supporting documents.
(iii) In the case of a cash dividend that is
effectuated through an intermediary partnership (as described in section 3.02 of
this notice) that is foreign and is not required under section 6031 to file an information return, substantiation that the
applicable requirements set forth in section 3.02 of this notice (regarding allocations under sections 702 and 704, and
the separate statement of items pursuant to
§1.702–1(a)(8)(ii)) were met.

481

.03 Safe Harbor
(a) In General. If a taxpayer meets
the requirements under sections 8.03(b),
8.03(c), and 8.03(d) of this notice, then
the taxpayer will have established to the
satisfaction of the Commissioner that the
amount of the dividend has been invested
in the United States pursuant to the domestic reinvestment plan as required under section 965(b)(4). This safe harbor is
not the exclusive method of satisfying the
Commissioner. If the safe harbor is not
met, the determination will be made under a facts and circumstances analysis described in section 8.04 of this notice.
(b) Substantive Requirements. Expenditures comprising at least 60 percent of
the amount of total funds with respect to
permitted investments to be made pursuant
to the domestic reinvestment plan meet
both of the following requirements:
(i) Such expenditures have been made,
or are the subject of a binding contract or
commitment entered into with persons unrelated to the taxpayer (within the meaning of section 267(b), other than section
267(b)(8)), by the end of the second taxable year following the taxable year for
which the taxpayer elected to apply section
965; and —
(ii) Such expenditures constitute permitted investments listed in section 5 of
this notice (other than investments described in section 5.05(c) of this notice).
(c) Annual Reporting. The taxpayer satisfies the reporting requirements of section 8.02(a) of this notice for the taxable
year for which the taxpayer elected section
965 to apply and each of the two subsequent taxable years (unless all investments
have been made pursuant to the domestic
reinvestment plan prior to the beginning of
either such taxable year) and includes in
such reporting the representations set forth
below, as applicable:
(i) In an annual report filed for a taxable year no later than the second taxable
year following the taxable year to which
the taxpayer elected to apply section 965,
representations —
(A) that the requirements of section
8.03(b) of this notice have been met; and
(B) that the taxpayer intends to make
the remaining amount of investments, if
any, pursuant to the domestic reinvestment
plan no later than the end of the fourth
taxable year following the taxable year to

2005–6 I.R.B.

which the taxpayer elected to apply section
965.
A taxpayer may cease annual reporting
pursuant to section 8.02(a) and this section
8.03(c) after such statement including such
representations is filed.
(ii) If the repayment of debt during the
taxable year is intended to qualify as a
permitted investment pursuant to section
5.05(a) of this notice, representations —
(A) That such repayment of debt contributes to the financial stabilization of the
taxpayer in the United States in accordance
with section 5.05(a) of this notice;
(B) That at the time the domestic reinvestment plan was approved by the taxpayer’s president, chief executive officer,
or comparable official, the taxpayer’s reasonable business judgment was that the financial stabilization resulting from such
repayment of debt will be a positive factor in its ability to retain and create jobs in
the United States in accordance with section 5.05(a) of this notice; and
(C) That, at the time of the repayment,
the corporation had no plan or intent to
incur additional debt under substantially
the same terms in accordance with section
5.05(a) of this notice.
(iii) If the satisfaction of an obligation
to fund a qualified plan (within the meaning of section 401(a)) is intended to qualify as a permitted investment pursuant to
section 5.05(b) of this notice, representations —
(A) That such satisfaction of a qualified plan funding obligation contributes to
the financial stabilization of the taxpayer
in accordance with section 5.05(b) of this
notice; and
(B) That at the time the domestic reinvestment plan was approved by the taxpayer’s president, chief executive officer,
or comparable official, the taxpayer’s reasonable business judgment was that the
financial stabilization resulting from such
satisfaction of a qualified plan funding
obligation will be a positive factor in its
ability to retain and create jobs in the
United States in accordance with section
5.05(b) of this notice.
(d) Documentation and Production.
The taxpayer satisfies the documentation
and production requirements of section
8.02(b) of this notice.

2005–6 I.R.B.

.04 Facts and Circumstances
(a) In General. If a taxpayer does
not satisfy the safe harbor described in
section 8.03 of this notice, the taxpayer
must establish to the satisfaction of the
Commissioner that, taking into account
the facts and circumstances, the amount
of the dividend has been, or will be, invested in the United States pursuant to the
domestic reinvestment plan as required
under section 965(b)(4). The fact that
the safe harbor has not been satisfied,
however, is not relevant in determining
whether the dividend has been invested in
the United States pursuant to the domestic reinvestment plan as required under
section 965(b)(4). Among the facts and
circumstances that may be relevant in establishing to the satisfaction of the Commissioner that the amount of the dividend
has been invested in the United States pursuant to the domestic reinvestment plan as
required under section 965(b)(4) are those
in sections 8.04(b), 8.04(c), and 8.04(d) of
this notice.
(b) Relevant Facts and Circumstances.
Relevant facts and circumstances for purposes of this section 8.04 include:
(i) The time period prescribed in the
domestic reinvestment plan, taking into
account the nature of the investments to
be made in the United States and other
facts and circumstances, during which the
taxpayer anticipates completing all investments to be made pursuant to the domestic
reinvestment plan. See section 4.03 of this
notice.
(ii) The degree of specificity used in the
domestic reinvestment plan describing anticipated permitted investments. See section 4.03 of this notice.
(iii) The extent to which the taxpayer
has completed the investment of the dividend in the United States as required under
section 965(b)(4), taking into account the
nature of the investments to be made in the
United States and other facts and circumstances.
(c) Annual Reporting. Relevant facts
and circumstances also include the extent
to which the taxpayer has complied with
the reporting requirements described in
section 8.02(a) of this notice, and whether
the taxpayer includes in an annual report
filed for the taxable year no later than the
second taxable year following the taxable

482

year to which the taxpayer elected to apply
section 965 the following representations:
(i) that the taxpayer will agree, upon
a request by the Commissioner, to enter
into an agreement to extend the statute of
limitations on assessment and collection
with respect to the DRD claimed under
section 965(a) for the taxable year to which
the taxpayer elected to apply section 965;
and
(ii) that the taxpayer will agree, upon
a request by the Commissioner, to enter
into a multi-year agreement with respect to
the taxpayer’s completion of the domestic
reinvestment plan.
An agreement entered into with the
Commissioner may determine the extent
of any continuing reporting and documentation requirements pursuant to this
section 8.04(c) and section 8.04(d) of this
notice.
(d) Documentation and Production.
Relevant facts and circumstances also
include the extent to which the taxpayer
satisfies the documentation and production requirements of section 8.02(b) of this
notice.
SECTION 9. TRANSITION RULES
.01 In General.
All domestic reinvestment plans are
subject to the guidance provided in this
notice. Thus, for example, expenditures
described in Section 6 of this notice are
non-permitted investments, even if such
expenditures were made prior to the issuance of this notice.
.02 Dividends Paid Prior to January 13,
2005.
If a domestic reinvestment plan approved prior to January 13, 2005 is not in
conformity with the guidance provided in
this notice, the taxpayer may modify such
plan to comply with the guidance herein
not later than March 14, 2005, even if
the dividend (or dividends) to which the
plan relates has already been paid. Any
domestic reinvestment plan that is so modified must be subsequently approved by
the taxpayer’s president, chief executive
officer, or comparable official, and by the
taxpayer’s board of directors, management committee, executive committee, or
similar body.

February 7, 2005

.03 Tax Returns Filed Prior to January
13, 2005.
A taxpayer that has filed its tax return
for the taxable year for which it elects section 965 to apply prior to January 13, 2005,
may satisfy the reporting requirements of
sections 8.02(a), 8.03(c) or 8.04(c) of this
notice on an amended tax return that is
filed by the due date (including extensions)
of the tax return for such taxable year.
SECTION 10. EFFECTIVE DATE
This notice is effective for the taxable
year for which taxpayers have elected section 965 to apply, and subsequent taxable
years as relevant.
SECTION 11. PAPERWORK
REDUCTION ACT
The collections of information contained in this notice have been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) under control number
1545–1926.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
control number.
The collections of information are in
sections 7, 8, and 9 of this notice. This
information is required to provide the
IRS sufficient information to determine
whether a taxpayer has properly elected
to apply section 965 to a taxable year, to

February 7, 2005

determine whether a dividend has been
invested in the United States pursuant to
a domestic reinvestment plan under section 965(b)(4), and to determine whether
a taxpayer has properly applied certain
transition rules. The collections of information are required to obtain the benefit of
section 965 for a taxable year. The likely
respondents are business corporations.
Estimated total annual reporting and/or
recordkeeping burden: 3,750,000 hours.
Estimated average annual burden hours
per respondent: 150 hours.
Estimated number of respondents:
25,000.
Estimated annual frequency of responses: on occasion and annually.
The collections of information contained in this notice have been submitted
to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)). Comments on the collections of
information should be received by February 14, 2005. Comments are specifically
requested concerning:
Whether the proposed collections of information are necessary for the proper performance of the functions of the Internal
Revenue Service, including whether the
information will have practical utility;
The accuracy of the estimated burden
associated with the proposed collections of
information (see below);
How the quality, utility, and clarity of
the information to be collected may be enhanced;
How the burden of complying with the
proposed collections of information may

483

be minimized, including through the application of automated collection techniques
or other forms of information technology;
and
Estimates of capital or start-up costs
and costs of operation, maintenance, and
purchase of services to provide information.
Comments concerning the accuracy of
the burden estimate and suggestions for reducing the burden of the final or temporary regulations should be sent to the Office of Management and Budget, Attn:
Desk Officer for the Department of the
Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503,
with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington
DC 20224.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 12. DRAFTING
INFORMATION
The principal author of this notice
is Jeffrey L. Vinnik of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and
the Treasury Department participated in
its development. For further information
regarding this notice, contact Mr. Vinnik
at (202) 622–3840 (not a toll-free call).

2005–6 I.R.B.