The “determine and document” requirement in Notice 2025‑75 is “ambiguous and potentially onerous,” and Treasury should eliminate, simplify or replace it, the AICPA told Treasury and IRS officials in a letter last week.
In the letter, the AICPA asserted that the notice’s requirement that Sec. 951(a) inclusion shareholders “determine and document that the dividend increased the taxable income of a United States person” does not adequately explain the level of analysis, substantiation or third-party information needed to demonstrate an increase in taxable income.
The AICPA recommended that Treasury adopt one of two proposed approaches that it contends would lessen the administrative burden of compliance while remaining consistent with the treatment of dividends under existing U.S. tax law.