Law360 Comments on Incoming Timing Rules Letter from Caplin & Drysdale Attorneys

Law360 Tax Authority

Caplin & Drysdale has asked the Internal Revenue Service to not require the reporting of unpaid consideration when that consideration is contingent upon future events.

In a letter to the IRS, Caplin & Drysdale Members Richard Skillman and James Salles said the proposed rules should provide that any unpaid consideration contingent on future events is not subject to inclusion under Internal Revenue Code Section 451(b) (IRC §451(b)). The rules should reflect that some transactions or contracts that are contingent upon future performance do not endow parties with an enforceable right to any consideration, not just increases in consideration, according to the letter, which was sent Dec. 9.

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