On August 1, 2018, the I.R.S. issued 145 pages of proposed regulations (REG-104226-18) relating to the Code §965 Transition Tax applicable to the 2017 taxable year of U.S. Shareholders holding interests in a deferred foreign income corporation (“D.F.I.C.”). A D.F.I.C. is any specified foreign corporation of a U.S. Shareholder that reports positive accumulated post-1986 deferred foreign income as of November 2, 2017, or December 31, 2017.

The proposed regulations modify and provide guidance in addition to three I.R.S. notices issued earlier this year. Here are some highlights.