Washington, D.C. (February 10, 2026) – In a letter sent to the Department of the Treasury and the Internal Revenue Service (IRS), the American Institute of CPAs (AICPA) submitted recommendations regarding Notice 2025-75, Transition Rule for Applying Section 951(a)(2)(B), one of the four international tax notices released as part of H.R. 1. The transition rule modifies the application of section 951(a)(2)(B) for certain taxable years of foreign corporations beginning before January 1, 2026.
The letter addresses how U.S. taxpayers may face significant practical challenges in obtaining detailed tax information, especially when transactions have already closed and there is no longer a relationship with the buyer or no post contractual obligation to provide post-closing tax certifications. Requiring taxpayers to obtain or reconstruct such information may result in inconsistencies that are not within the taxpayer’s control.
The AICPA letter provides recommendations to modify and simplify the “determine and document” requirement in the Notice by either eliminating or significantly paring back the documentation requirement or alternatively adopting a per se rule or safe harbor.
The AICPA recommends the IRS:
Eliminate or significantly pare back the documentation requirement regarding transactions where the dividend is required by law to be included in the gross income of a U.S. person and where no exclusion or deduction could reasonably apply.
Alternatively adopt a per se rule or safe harbor under which the “determine and document” requirement does not apply to dividends received by certain U.S. persons for whom inclusion in taxable income is mandatory under the Code. For all other situations, Treasury and the IRS should clarify that federal income tax principles must be analyzed and the type of documentation is sufficient to demonstrate that the dividend increased taxable income.
“This guidance does not explain what level of analysis, substantiation or third-party information is required to complying with the “determine and document” requirement,” said Reema Patel, Senior Manager for Tax Policy & Advocacy for the AICPA. “In addition, many transactions to which the transition rules apply have already closed, making the AICPA’s recommendations even more essential.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with 397,000 members and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting. A founding member of the Association of International Certified Professional Accountants, the AICPA sets ethical standards for the profession, attestation standards, and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state, and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, partners across the profession to build future talent, and drives continuing education to advance the vitality, relevance, and quality of the profession.
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Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com