Subpart F and Domestic Partnerships: One More Time, With Feeling

From time to time over many years, I have expressed the view that the government’s approach to domestic partnerships in the context of subpart F is wrong, both as a matter of textual interpretation and as a matter of policy.1 The new proposed regulations under GILTI2 (§951A)3 illustrate the lengths to which the government will go to preserve its erroneous rule. As we will see, the government has twisted itself into a pretzel in an attempt to reconcile its basic subpart F approach to domestic partnerships with the dictates of GILTI. This is not the first time this kind of thing has happened.4 The only surprise was that practitioners seem to have been surprised by the proposed regulations.

Link to full publication here.