# Requirement of return.
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendments.
**SUMMARY:**
This document contains corrections to Treasury Decision 9885, which was published in the * Federal Register * on Friday, December 6, 2019. Treasury Decision 9885 implementing the base erosion and anti-abuse tax, designed to prevent the reduction of tax liability by certain large corporate taxpayers through certain payments made to foreign related parties and certain tax credits.
**DATES:**
*Effective date.* This correction is effective on February 19, 2020 and is applicable on December 6, 2019.
**FOR FURTHER INFORMATION CONTACT:**
Concerning § 1.59A-9, Azeka J. Abramoff, Sheila Ramaswamy, or Karen Walny at (202) 317-6938; concerning § 1.6038A-2, Brad McCormack or Anand Desai at (202) 317-6939 (not toll-free numbers).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final regulations (TD 9885) that are the subject of this correction are under sections 59A and 6038A of the Internal Revenue Code.
**Need for Correction**
As published December 6, 2019 (84 FR 66968), the final regulations (TD 9885; FR Doc. 2019-25744) contained errors that may prove misleading and therefore need to be corrected.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
**PART 1—INCOME TAXES**
**26 CFR Part 1**
*Paragraph 1.* The authority citation for part 1 continues to read in part as follows:
**Authority:**
26 U.S.C. 7805 * * *
**26 CFR Part 1**
*Par. 2.* Section 1.59A-9 is amended by revising the text of paragraphs (b)(1) and (c)(2)(ii) and the first sentence of paragraph (c)(5)(ii) to read as follows:
§ 1.59A-9
(b) * * *
(1) * * * If a taxpayer pays or accrues an amount to one or more intermediaries (including an intermediary unrelated to the taxpayer) that would have been a base erosion payment if paid or accrued to a foreign related party, and one or more of the intermediaries makes (directly or indirectly) corresponding payments to or for the benefit of a foreign related party as part of a transaction (or series of transactions), plan or arrangement that has as a principal purpose of avoiding a base erosion payment (or reducing the amount of a base erosion payment), the role of the intermediary or intermediaries is disregarded as a conduit, or the amount paid or accrued to the intermediary is treated as a base erosion payment, as appropriate.
(c) * * *
(2) * * *
(ii) * * * The arrangement between FP, DC, and Corp A is deemed to result in a $95x base erosion payment under paragraph (b)(1) of this section because DC's payment to Corp A would have been a base erosion payment if paid to a foreign related party, and Corp A makes a corresponding payment to FP as part of the series of transactions that has as a principal purpose of avoiding a base erosion payment.
(5) * * *
(ii) * * * The transactions between FP, DC, and Bank are deemed to result in a base erosion payment under paragraph (b)(1) of this section because DC's payment to Bank would have been a base erosion payment if paid to a foreign related party, and Bank makes a corresponding payment to FP as part of the series of transactions that has as a principal purpose of avoiding a base erosion payment.* * *
**26 CFR Part 1**
*Par. 3.* Section 1.6038A-2(g) is amended by revising the third sentence to read as follows:
§ 1.6038A-2
(g) * * * Paragraph (b)(7)(ix) of this section applies to taxable years beginning on or after June 7, 2021. * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).