Under the new tax law, foreign earnings held by domestic corporations in the form of cash and cash equivalents are generally intended to be taxed at a 15.5 percent rate for 2017 calendar years, and the remaining earnings are intended to be taxed at an 8 percent rate for 2017 calendar years. The IRS said that the lower effective tax rates  are achieved by way of a participation deduction. Taxpayers may generally elect to pay the transition tax in installments over an eight-year period. Past that point, the proposed regulations contain detailed information on the calculation and reporting of a United States shareholder’s section 965(a) inclusion amount, as well as information for making the elections available to taxpayers under section 965.

The IRS is giving the public 60 days to comment after the proposed regulations are published in the Federal Register.