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IRS Moves to Simplify Foreign Currency Tax Rules
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Subscribe27 FEB 2026 / IRS UPDATES
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The US Treasury and the Internal Revenue Service (IRS) have proposed simplifications to the Section 987 regulations that calculate taxable income or losses and foreign currency gain or losses for multinational corporations. The changes aim to alleviate the computational burden on tax departments by moving from daily to annual netting of remittances, narrowing loss regulations, simplifying the approach towards foreign corporations, and allowing a return to the “equity and basis pool method” proposed in 1991.
In 1991, the IRS handed us a blueprint for handling foreign currency inside Section 987. Then it sat on the shelf for three decades like a tax code time capsule. Fast forward to December 2024, Treasury finally rolled out final Section 987 regulations, com...
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