{"database": "press", "table": "releases", "rows": [["https://www.heller.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=3A16A1ED-E72E-4D7C-A799-EFC89B1ED301", "Heller Leads Letter to Treasury Secretary Lew Expressing Concerns Over Proposed 385 Rules", "2016-07-05", "2016", "2016-07", "Republican", "House", "NV", "Dean Heller", "H001041", "www.heller.senate.gov", null, null, "legacy", "Letter highlights unintended negative consequences of the proposed rules for American businesses\r\n\u00a0\r\n(Washington, DC) \u2013 Today, United States Senator Dean Heller along with United States Senators Mike Crapo (ID), Pat Roberts (KS), John Cornyn (TX), John Thune (SD), Johnny Isakson (GA) and Tim Scott (SC), all Republican colleagues from the Senate Finance Committee, sent a letter to United States Treasury Secretary Jack Lew strongly urging the Department of the Treasury to extend the public comment period of the proposed rules as well as to ensure both ordinary business transactions, such as cash pooling, and burdensome compliance requirements are reformed.\r\nEarlier this year, the Department of the Treasury released proposed rules under Section 385 which would give it the authority to re-characterize debt as equity under certain circumstances. These new rules, which the Department of the Treasury plans to \u201cmove swiftly to finalize,\u201d are broad and far-reaching and are already affecting ordinary business operations, detrimentally impacting job creation and capital investments.\r\nA PDF copy of the letter can be found here. \r\nFull text of letter to Secretary Lew:\r\nThe Honorable Jacob Lew\r\nSecretary of the Treasury\r\nU.S. Department of the Treasury   1500 Pennsylvania Avenue, NW    Washington, DC\u00a0 20220\r\nRe: Proposed Regulations under Internal Revenue Code section 385 (REG-108060-15)\r\nDear Secretary Lew:\r\nAs supporters of overhauling our broken tax code, we strongly believe that tax reform, done the right way, can promote job growth and strengthen our nation\u2019s global competitiveness.\u00a0 Given our concerns over job growth and global competitiveness, we are deeply concerned with the Treasury Department\u2019s proposed debt-equity regulations under Internal Revenue Code section 385 (the \u201cproposed regulations\u201d)[1] that were released on April 4, 2016. We write today to detail our concerns over the proposed regulations and request that you work with us to address the series of issues discussed in this letter.\r\nIn particular, we ask that you take the following steps:\r\n \r\nExtend the July 7, 2016, comment period deadline to at least October 5, 2016;\r\nConsider the comments and feedback you have received through the extended comment period; and\r\nChange the effective date for these rules so that they would apply to debt instruments issued, or deemed issued, no sooner than 90 days after the date the regulations are issued in final form.\r\n \r\nOver the past few months, we have heard from numerous stakeholders, including small businesses, business associations, and companies with operations in our home states that would be impacted if the proposed regulations are implemented without significant alterations.\u00a0 We respectfully request that, at a minimum, you substantially modify the proposed rules so that ordinary business transactions unrelated to tax avoidance are not adversely affected by the broad scope of these proposed rules.\u00a0 Additionally, we are alarmed with your plan to \u201cmove swiftly to finalize\u201d these proposed regulations, which in current form would provide a stark impediment to jobs and capital investment.\u00a0 The Treasury Department\u2019s apparent haste to finalize these complex rules is especially troubling given that economic growth remains anemic.\u00a0 Simply put, we believe finalizing these regulations will create new disincentives to investment in the United States and threaten to further exacerbate our current economic woes.\u00a0\r\nAccording to the Preamble of the proposed regulations, the intent of these rules was \u201cmotivated in part by the enhanced incentives for related parties to engage in transactions that result in excessive indebtedness in the cross-border context.\u201d\u00a0 While we share your concern regarding erosion of the U.S. tax base, the proposed regulations are far broader than the types of cross-border transactions associated with \u201cearnings stripping.\u201d\u00a0 Unlike the other regulations issued by Treasury on April 4, 2016, that directly relate to corporate tax inversions, the proposed section 385 regulations represent a fundamental shift in how debt and equity are characterized, with far-reaching implications for a wide range of American businesses.\u00a0 Far from the stated intent of addressing abusive tax transactions, we are concerned that the actual effect of these regulations will be to drive investment and capital outside of America\u2019s borders, further eroding the U.S. tax base.\u00a0 In our view, creating obstacles to job creation and impeding economic growth should not be the outcome of any proposed Treasury regulations.\r\nWe commend the House Ways and Means Committee for demonstrating bipartisan concern with the proposed rules.\u00a0 In fact, the letter written by Democratic members of the Committee dated June 22, 2016, calls for addressing many of our own concerns because the proposed regulations would \u201cadversely affect ordinary course business transactions between related parties lacking tax avoidance motives.\u201d\r\nBelow are just a few of the concerns we have repeatedly heard from stakeholders regarding these regulations. We note this is not an exhaustive list. In addition to the other critical issues that have been raised, we expect to see\u2014at the very least\u2014the following reforms should Treasury decide to finalize the proposed regulations:\r\n \r\nEnsure that S corporations, a critical component of America\u2019s small business community, do not lose their S corporation tax status by virtue of having their debt re-characterized as equity and are not penalized for their domestic-to-domestic transactions;\r\nEnsure that non-tax motivated cash management techniques, such as cash pooling or revolving credit arrangements, are exempted;\r\nExempt foreign-to-foreign transactions from the scope of the proposed regulations;\r\nAddress the \u201ccascading effect\u201d of the currently drafted regulations, where a single tainted transaction funded with intercompany debt can create a multitude of additional tainted transactions;\r\nExtend the 30-day deadline for meeting the documentation requirements;\r\nExpand the $50 million intercompany debt threshold so that more small businesses will be exempt from these rules;\r\nEnsure the regulations take into account the global economic and regulatory environment in which regulated financial groups operate; and\r\nEnsure that local interest deductions for U.S. multinational businesses are not eliminated under the OECD BEPS hybrid transaction concepts.\r\n \r\nGiven the scope of the proposed rules, we, like businesses large and small across America, are still analyzing the potential impact these rules could have on business operations.\u00a0 As you know, Treasury\u2019s intention to issue such broad-ranging rules under section 385 was not included in the most recent Treasury Priority Guidance Plan, as would normally be the case.\u00a0 As a result, many businesses have only recently become aware of how these far-reaching and complex regulations will impact their daily business activities.\u00a0 Given the broad range of issues that are already disrupting ordinary business operations, we ask that you extend the July 7, 2016, comment period and change the effective date of the proposed debt-equity rules to a date that is 90 days after the regulations are finalized. \u00a0Additionally, considering your expedited scheduling of the July 14, 2016, public hearing on the proposed regulations, we respectfully request you make a thorough review of any public comments, including those from congressional lawmakers, before finalizing any rules.\r\nPlease know we are prepared to work with the Treasury Department in any way to improve America\u2019s global competitiveness and promote more robust job creation.\u00a0 Unfortunately, the proposed regulations, as drafted, appear to head in exactly the opposite direction, imposing unnecessary costs on American businesses at precisely the time when our economy is already overburdened by excessive regulation.\u00a0 While we believe a better approach would be to focus on a more narrowly-tailored effort to target those tax transactions that are actually abusive, we urge you to\u2014at a minimum\u2014address the concerns raised in this letter should Treasury insist on finalizing the proposed regulations. We respectfully request a response to our concerns by July 15, 2016.\u00a0\r\n\u00a0Sincerely,\r\nDean Heller\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mike Crapo\r\nU.S. Senator \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 U.S. Senator\r\nPat Roberts\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 John Cornyn\r\nU.S. Senator \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 U.S. Senator\r\nJohn Thune\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Johnny Isakson\r\nU.S. Senator \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 U.S. Senator\r\nTim Scott\r\nU.S. Senator\r\ncc:\u00a0\r\nThe Honorable Mark J. Mazur, Assistant Secretary for Tax Policy, U.S. Department of the Treasury\r\nMr. Robert B. Stack, Deputy Assistant Secretary (International Tax Affairs), U.S. Department of the Treasury\r\nMs. Emily S. McMahon, Deputy Assistant Secretary (Tax Policy), U.S. Department of the Treasury\r\n###", 1, "2026-03-30T12:14:52Z", "2026-03-30T12:14:52Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://www.heller.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=3A16A1ED-E72E-4D7C-A799-EFC89B1ED301"], "units": {}, "query_ms": 1.2479587458074093, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}