Source: https://intltax.typepad.com/intltax_blog/2014/12/international-plrs-of-note-for-the-46th-week-of-2014-.html
Timestamp: 2019-04-18 10:58:45+00:00

Document:
Recently the IRS published the following Chief Counsel Advice relating to international taxation.
CCA 201446020 - Loans were made from CFC1 to a lower tier CFC with limited earnings and profits ("E&P"). The lower tier CFC then loaned the cash to the U.S. parent. The U.S. parent claimed that the Code §956 inclusions were limited to the E&P of the lower tier CFC. The IRS applied Treas. Reg. §1.956-1T(b)(4) and argued that one of the principal purposes of the back-to-back loans was to avoid the application of Code §956 to CFC1. Accordingly, the U.S. parent must include in income the Code §956 amounts derived from CFC1 indirectly holding the U.S. parent loans rather than the Code §956 amounts which would be derived if the lower tier CFC were considered to hold the loan.
We created a chart for a similar CCA that was released earlier this year. The blog post can be viewed here.
CCA 201447030 - Interest paid by a U.S. corporation's foreign disregarded entity is U.S. source income and subject to withholding under Code §1442. Code §861(a)(1).

References: §956
 §1
 §956
 §956
 §956
 §1442
 §861