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Notice 2021-36 Deferring Applicability Date For QDP Reporting

On June 10, 2021, the IRS published Notice 2021-36, stating that it intends to amend regulations under sections 59A and 6038A to defer the applicability date of certain provisions of the regulations relating to qualified derivatives payments (QDP) reporting until taxable years beginning on or after January 1, 2023. Previously, in 2019, the IRS published TD 9885, which included final regulations addressing the base erosion and anti-abuse tax (BEAT) of section 59A. The 2019 final regulations generally apply to taxable years ending on or after December 17, 2018. In those regulations, a payment does not qualify as a QDP unless the taxpayer reports the information required in Treas. Reg. section 1.6038A-2(b)(7)(ix) for the taxable year. If a taxpayer does not report in accordance with those requirements, then the payments are not eligible for the QDP exceptions and are base erosion payments until another exception applies. These requirements apply to taxable years beginning on or after June 7, 2021. In October 2020, the Treasury Department and IRS published TD 9910 with additional final regulations related to section 59A.

Section 59A Qualified Derivative Payments Reporting Requirements:

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Notice 2021-36 Deferring Applicability Date For QDP Reporting

This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.

Comply Connect – March 2024 – Issue 9

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