The US Treasury Department and the Internal Revenue Service (IRS) have issued temporary regulations (TD 9589) under section 956 of the Internal Revenue Code (IRC) to provide guidance on the treatment of obligations of US persons arising from non-periodic (upfront) payments made pursuant to certain notional principal contracts (NPC). The temporary regulations affect US shareholders (i.e. US persons that own 10% or more of the voting power) of controlled foreign corporations (CFCs) that make such upfront payments. IRC section 956 requires an income inclusion by US shareholders of a CFC that invests certain earnings and profits in US property on...