Taxpayers have a decided choice on how to approach the recently finalized Section 385 regulations
Will documentation compliance for Section 385 ("Final Regulations") become a resource-intensive and potentially outsourced activity that drains critical internal knowledge from the tax department? Or will taxpayers implement best practice processes to make the exercise a value-added opportunity using streamlined and existing resources? Navigant believes there are actions taxpayers can take to help achieve the latter.
While the Final Regulations are much narrower in scope than originally proposed, the substance of the documentation requirements have not changed. Complying will involve myriad data elements that reside in disparate departments with decentralized oversight.
Navigant recommends a two-pronged process to implement best practices that address the Final Regulations.