IRS Proposes Applicability Date Changes for Foreign Government Income Taxation, Partially Withdraws Prior Proposal

The IRS published proposed regulations under I.R.C. §892 addressing the applicability dates of proposed rules relating to the taxation of foreign governments’ income from U.S. investments and partially withdrew prior proposed applicability date provisions issued on Dec. 15, 2025. The proposed rules would provide a transition period of at least 90 days after publication of final regulations, or until the start of the first taxable year after publication, before new rules on debt acquisitions and effective control apply, and would preserve existing rules for certain previously acquired interests and binding commitments. Written or electronic comments and requests for a public ...