Background
On December 4, 2025, the IRS published three notices with the intention to issue further guidance regarding international tax legislation that was enacted or altered by the One Big Beautiful Bill Act (OB3).
A more thorough analysis of the below notices is forthcoming from Forvis Mazars.
Section 951(a)(2)(B)
Notice 2025-75 announces that the IRS and Treasury intend to issue proposed regulations regarding the transition rule for treatment of certain dividends taxpayers may receive from their foreign subsidiaries.
Prior to the enactment of OB3, a U.S. shareholder was to include their pro-rata share of a controlled foreign corporation’s (CFC) Subpart F income only if they owned the stock on the last day of the CFC’s taxable year. OB3 modified this to be based on the time-period of CFC ownership and added a transition rule.
The forthcoming regulations will address constraints of the transition rule, define key terms, and add a look-through rule for partnerships and S-corporations.
Section 960(d)(4)
Notice 2025-77 announces the IRS’ intention to issue proposed regulations related to IRC Section 960(d)(4) to clarify the application of the effective date enacted by OB3.
The notice confirms there was confusion on when to apply the effective date of June 28, 2025, based on a company’s tax year. The forthcoming proposed regulations under this section will provide guidance and examples on how to apply the effective date.
Section 250(b)(3)(A)(i)(VII)
Notice 2025-78 announces the IRS’ intention to issue proposed regulations on the application of an exclusion under §250(b)(3)(A)(i)(VII).
Before OB3, §250(b)(3)(A) defined deduction eligible income (DEI) as the excess, if any, of a domestic corporation’s gross income determined without regard to six categories of income. OB3 amended this section, adding an additional category of excluded income made from the sale or other disposition of intangible property or depreciable property arising after June 16, 2025.
According to the notice, the forthcoming proposed regulations under this section will define key terms such as sale or other disposition, intangible property, and other excluded property.
Action Items
Taxpayers may rely on the rules of this notice until the proposed regulations are published in the Federal Register provided that they are applied in their entirety and consistently.
For more information on these notices and their application to your income tax situation, please contact one of our trusted professionals.