The US Treasury Department announced on Friday that in conjunction with the Internal Revenue Service (IRS), it has withdrawn proposed regulations relating to the treatment of "obligation shifting transactions", including those involving lease stripping.
The regulations outlined complex rules designed to ensure that income from these types of transactions was accounted for properly.
In a statement, Assistant Secretary for Tax Policy, Pam Olson explained that:
"Since the proposed regulations were issued in 1996, the IRS has won two court cases that have upheld the allowance of tax benefits from lease strip transactions. In view of the IRS's victories in these cases, we have concluded that the regulations are unnecessary to ensure proper accounting and that the complexity of the proposed regulations outweighs the potential benefit."
The full text of the proposed lease stripping regulations is available in the Tax News Resources Section
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