By Carlos Somoza ( May 24, 2018, 5:30 PM EDT) -- Internal Revenue Code Section 965 as enacted by the Tax Cuts and Jobs Act imposes a one-time transition tax on the deferred earnings and profits of certain foreign corporations owned by U.S. persons. This provision was enacted as a result of the United States transitioning to a quasi-territorial tax system.[1] As a way of lessening the impact of this acceleration of income tax on previously untaxed foreign earnings, Congress allowed the Section 965 tax liability to be deferred and paid over an eight-year period with the first installment due on April 17, 2018. However, in regulatory guidance issued just three days before that due date, the Internal Revenue Service announced that it would apply a taxpayer's overpayment of regular tax to the overall unsatisfied installment liability. This IRS position, which is inconsistent with the plain language of Section 965 and congressional intent, creates problems for both individual and corporate taxpayers....