Regs forthcoming on domestic partnerships used to block subpart F income, IRS says

The Internal Revenue Service on May 14 announced in Notice 2010-41 that it will issue regulations classifying certain domestic partnerships as foreign for purposes of determining which U.S. shareholder must include in its gross income a pro rata share of a controlled foreign corporation's (CFC's) subpart F income. The regulations will apply to the taxable years of domestic partnerships ending after May 13, 2010.

The general structure addressed was identified in Notice 2009-7 as a transaction of interest (thus reportable under Treasury reg. section 1.6011-4(b)). Notice 2009-7 describes a transaction (and substantially similar transactions) in which a domestic partnership is used to block the inclusion of subpart F income.