slides - NABE

Dividend Offset Softens the Impact of §482Allocations In some circumstances, otherwise taxable dividends received by aU.S. controlled party are treated as a prepayment of deemed payable/receivable, and dividends excluded from taxable income Under Rev. Proc. 65-17, any dividend paid during the year to whichthe allocation relates could be treated as a pre-payment Rev. Proc. 99-32 limits the utility of the dividend offset For IRS-initiated adjustments, only dividends counted are those madeduring the year in which a closing agreement is finalized For taxpayer-initiated adjustments, eligible dividends are those made in (1)the year to which the primary adjustment relates and (2) the year in which atimely-filed original return is filed reporting the primary adjustment14