On September 1, 2020, the IRS issued final regulations regarding the base erosion and anti-abuse tax (“BEAT”) codified in IRC §59A. These regulations finalize the proposed BEAT regulations published on December 6, 2019 with certain refinements. Among other guidance, the final BEAT regulations provide detailed rules that allow corporate taxpayers to waive deductions for purposes of BEAT. Although waiving deductions will likely result in additional tax costs, the waiver election may be an easier and less costly solution than the alternative of making substantive business model or supply chain changes to mitigate BEAT.

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