Tax Tech Group Addresses Effects of Proposed Transition Tax Regs

October 9, 2018

CC:PA:LPD:PR (REG–104226–18)
Room 5203
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

Re: Comments on proposed § 965 regulations in REG–104226–18

Dear Sirs or Madams,

The Silicon Valley Tax Directors Group (“SVTDG”) hereby submits these comments on the above-referenced proposed regulations issued under § 965 of the Internal Revenue Code of 1986, as amended, in REG–104226–18, 83 Fed. Reg. 39514 (August 9, 2018) (the “Proposed Regs”). SVTDG members are listed in Appendix A of this letter.

Sincerely,

Robert F. Johnson
Co-Chair, Silicon Valley Tax Directors Group
Capitola, CA

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I. INTRODUCTION AND SUMMARY

A. Background on the Silicon Valley Tax Directors Group

The SVTDG represents U.S. high technology companies with a significant presence in Silicon Valley, that are dependent on R&D and worldwide sales to remain competitive. The SVTDG promotes sound, long-term tax policies that allow the U.S. high tech technology industry to continue to be innovative and successful in the global marketplace.

B. Summary of recommendations — changes that should be made to the Proposed Regs

We recommend that Treasury and the IRS make certain specific changes to, and reconsider certain aspects, of the Proposed Regs. Here we summarize our main recommendations.

We recommend that Treasury provide guidance on the treatment of § 965(b) PTI for purposes of other Code provisions — for example, under §§ 1248(a) and (d)(1), and under 951(a)(1)(B) and 956. We also recommend Treasury consider modifying the rules relating to crediting foreign taxes associated with E&P deficit foreign corporations (“E&P DFCs”) and with § 965(b) PTI of deferred foreign income corporations (“DFICs”). Specified E&P deficits are allocated away from E&P DFCs, but foreign taxes associated with the E&P deficits remain with the E&P DFCs. Correspondingly, § 965(b) PTI of a DFIC can result in stranding of foreign taxes in a E&P DFC. Treasury should analyze these results, and consider whether a modification of the foreign tax credit rules is appropriate to address them.

We make two sets of recommendations relating to the “double counting” rule in Prop. § 1.965-4(f)(2). We show that the double counting rule can — in certain situations — lead to double counting of E&P. Rather than trying to shore up this rule by amendment, we recommend Treasury consider withdrawing the double-counting rule — so that SFC-to-SFC distributions and payments made or accrued would generally be taken into account for purposes of calculating the post-1986 E&P of the payor and payee SFCs. The general rule in Prop. § 1.965-4(b) — which disregards transactions for purposes of determining the amounts of all § 965 elements of a U.S. shareholder — functions as an adequate backstop to deter avoidance transactions.

We also recommend Treasury provide rules for coordinating the double-counting rule with the ordering rule in Prop. § 1.965-2(f). It's unclear, for example, whether specified payments under the double-counting rule are also disregarded under the second-step of the ordering rule. Different interpretations can lead to disparate outcomes, as we show. We recommend that Treasury study this issue, and possibly clarify that specified payments determined under Prop. § 1.965-4(f)(1) are disregarded in step two of the ordering rule, but would then be taken into account in the fourth step of the ordering rule.

We recommend the Proposed Regs be modified to prevent double counting of cash in cash pooling, cash sweeps, revolving credit, and similar arrangements conducted by U.S. multinational corporations in the ordinary course of business, not motivated by U.S. federal income tax considerations. We recommend the Proposed Regs clarify that the net balance in a cash pool arrangement is the appropriate measure of a U.S. shareholder's (or a consolidated group's) cash. We recommend the Proposed Regs also be modified to treat — in a situation involving several disregarded entities participating in a cash pooling arrangements — only the net balance as cash of the CFC.

We recommend Treasury withdraw the rule in Prop. § 1.965-4(c)(2) giving blanket disregard of all prescribed change-in-entity-classification elections, and replace it with a more focused rule targeting situations designed to reduce post-1986 E&P of affected entities. This is justified on the grounds that the policy underlying § 965 isn't undermined by consequences of certain of the prescribed elections. We illustrate with an example how disregard of a change-in-entity-classification election can in a common situation lead to a deemed creation of post-1986 E&P surely not intended by Congress.

We recommend that Treasury should — solely in the context of § 965 — consider relaxing application of § 960(a)(3) to allow it to apply to foreign income taxes paid or accrued by lower-tier foreign corporations with respect to distributions of § 965(a) PTI and § 965(b) PTI. Policy considerations underlying § 965 warrant taking a more relaxed approach to application of § 960(a)(3) in the context of foreign taxes imposed on PTI created under § 965 (or course, after reduction for the relevant “applicable percentage” of creditable foreign taxes).

We recommend the Proposed Regs be modified to exclude previously taxed income (“PTI”) under §§ 959(c)(1) and (c)(2) from the definition of post-1986 earnings and profits (“E&P”). The relevant definition of post-1986 E&P in § 965(d)(3) is silent on whether § 959 PTI is excluded, but we show, however, that without such an exclusion anomalous results can occur. We show, for example, that without such an exclusion double taxation of § 959 PTI can occur — this is contrary to Congressional intent that § 965 was meant to impose one-time taxation of non-previously-taxed post-1986 foreign E&P. Treasury has authority under § 965(o) to promulgate a regulation to carve § 959 PTI out of post-1986 E&P. Treasury exercised its rulemaking authority in a parallel situation — to prevent anomalous results — under § 902 to exclude PTI from an amount relevant for determining the amount of creditable foreign taxes. A similar regulation is warranted under § 965.

II. SVTDG CONCERNS WITH, AND RECOMMENDATIONS FOR CHANGES TO, THE PROPOSED REGS

A. Recommendations regarding treatment of § 965(b) PTI

Paragraph 965(b)(4) provides that for purposes of applying § 959 in any taxable year beginning with the taxable year described in § 965(a), with respect to any U.S. shareholder of a DFIC, an amount equal to such shareholder's reduction under § 965(b)(1) that's allocated to such DFIC under § 965(b) shall be treated as an amount that was included in such U.S. shareholder's gross income under § 951(a). This provision is made more precise in Prop. § 1.965-2(d)(1), which provides that the § 959(c)(2) E&P of a DFIC with respect to a § 958(a) U.S. shareholder are increased by an amount equal to the reduction to the § 958(a) U.S. shareholder's pro rata share of the § 965(a) earnings amount of the DFIC under § 965(b) — i.e., by an amount equal to the “§ 965(b) PTI”.¹ That is, the DFIC's § 959(c)(2) PTI is increased by the § 965(b) reduction of the U.S. shareholder's § 965(a) earnings amount of the DFIC.

We recommend that Treasury provide guidance on the treatment of § 965(b) PTI for purposes of other Code provisions.

Under § 1248(a), for example, if a U.S. person owning sufficient stock in a foreign corporation sells stock of the foreign corporation, any gain recognized on the sale is included in U.S. person's gross income as a dividend to the extent of the foreign corporation's E&P. But § 1248(d)(1) in essence provides a carve-out from the foreign corporation's E&P for any E&P attributable to any amount previously included in the U.S. person's gross income under § 951 (i.e. attributable to §§ 959(c)(1) or (c)(2) PTI), with respect to the stock sold, but only to the extent the inclusion of such amount didn't result in an exclusion of an amount from gross income under § 959. Does § 965(b) PTI form part of the § 1248(d)(1) PTI carve-out? Presumably it does; but we recommend Treasury provide guidance on this point.

For purposes of determining a U.S. shareholder's § 951(a)(1)(B) gross income inclusion with respect to the shareholder's § 956 amount, § 959(f)(1) provides that amounts that would be determined under § 951(a)(1)(B) are treated first as attributable to § 959(c)(2) PTI (and excluded from the shareholder's gross income under § 959(a)(2)), and then to § 959(c)(3) E&P. Is § 965(b) PTI included in the § 959(c)(2) PTI that can — under § 959(f)(1) — be recharacterized as § 959(c)(1) PTI? Presumably it is, but we recommend Treasury provide guidance on this point.

Lastly, we recommend Treasury consider modifying the rules relating to crediting foreign taxes associated with E&P DFCs and with § 965(b) PTI of DFICs. § 965(b) PTI of a DFIC arises when a portion of the aggregate of specified E&P deficits of all E&P DFCs gets allocated to a DFIC. Although specified E&P deficits are allocated away from E&P DFCs, foreign taxes associated with the E&P deficits remain with the E&P DFCs, and can be stranded there.

Treasury should analyze these results, and consider whether a modification of the foreign tax credit rules is appropriate to address them.

B. Recommendations on Prop. § 1.965-4 Disregard of certain transactions

1. Prop. § 1.965-4(f) Disregard of certain transactions occurring between E&P measurement dates — the “double-counting” rule should be clarified, and it can give rise to double inclusions of E&P

The double-counting rule provides that a “specified payment” made by a payor SFC to a payee SFC is disregarded for purposes of determining the post-1986 E&P of each such SFC as of the 12-31-2017 E&P measurement date.² A “specified payment” means any amount paid or accrued by the payor SFC, including a distribution with respect to its stock, satisfying four requirements. The second such requirement is that the payor SFC and the payee SFC don't have the same “tentative E&P measurement date,” defined in general for an SFC³ to be its E&P measurement date that would result in the “greater of” amount of accumulated post-1986 DFI.

The tentative E&P measurement date isn't well defined — for example, an SFC may have the same accumulated post-1986 DFI on both E&P measurement dates, yet have E&P changes between these dates. This can give rise to double inclusions of E&P.

In Example 1 below, suppose CFC1, CFC2, and CFC3 have $100, $0, and $0 of E&P, respectively on 11-02-2017, and that on 11-30-2017 CFC1 distributes $100 to CFC2, which then distributes $100 to CFC3. Because CFC2 has $0 post-1986 DFI on both E&P measurement dates, its tentative E&P measurement date isn't defined. If the tentative E&P measurement date for CFC2 is taken to be 11-02-2017, then the $100 CFC2 → CFC1 distribution is a specified payment (in part because CFC2 and CFC1 have different tentative E&P measurement dates — 11-02-2017 and 12-31-2017, respectively) and so is — under the double counting rule in Prop. § 1.965-4(f)(1) — disregarded for purposes of determining the post-1986 E&P of CFC2 and CFC1 on 12-31-2017 (i.e., CFC2 is assumed not to make, and CFC1 not to get, the $100 payment). The result is double counting of the $100 — once for CFC3 ($100 § 965(a) earnings amount, from 11-02-2017 E&P measurement date), and once for CFC2 ($100 § 965(a) earnings amount, from 12-31-2017 E&P measurement date).

Setting the tentative E&P measurement date for CFC2 to be 12-31-2017, instead of 11-02-2017, solves the double counting problem in Example 1, but arguably creates another double counting issue. Now the $100 CFC3 → CFC2 distribution is a specified payment (in part because CFC3 and CFC2 have different tentative E&P measurement dates) and — per Prop. § 1.965-4(f)(2) — is disregarded for determining the post-1986 E&P of CFC3 and CFC2. The $100 stays down at CFC3. But does this mean the upper chain, $100 CFC2 → CFC1, payment is correspondingly ignored for purposes of determining the post-1986 E&P of CFC2 and CFC1? Prop. § 1.965-4(f)(1) doesn't say so.

We recommend Treasury consider withdrawing the double-counting rule in Prop. § 1.965-4(f)(2) — so that SFC-to-SFC distributions and payments made or accrued would generally be taken into account for purposes of calculating the post-1986 E&P of the payor and payee SFCs. The general rule in Prop. § 1.965-4(b) — which disregards transactions for purposes of determining the amounts of all § 965 elements of a U.S. shareholder — functions as an adequate backstop to deter avoidance transactions.

2. The double-counting rule should be coordinated with the ordering rule in Prop. § 1.965-2(b)

We recommend Treasury provide rules for coordinating the double-counting rule with the ordering rule in Prop. § 1.965-2(f).

The second step of the ordering rule — Prop. § 1.965-2(b)(2) — involves determining the § 959 treatment of any SFC-to-SFC distribution. The third step in the ordering rule — Prop. § 1.965-2(b)(3) — involves determining, for each SFC, the § 965(a) inclusion amount (and all components of that amount, including the post-1986 E&P of the SFC as of the 12-31-2017 E&P measurement date).

Under the double-counting rule in Prop. § 1.965-4(f)(1), specified payments are disregarded for purposes of determining the post-1986 E&P of each of the payor SFC and payee SFC. Clearly, therefore, the specified payment is disregarded under the third step of the ordering rule (in particular, determining the post-1986 E&P of an SFC). It's unclear, however, whether specified payments are also disregarded under the second-step of the ordering rule. Different answers can lead to vastly different outcomes.

If, for example, an 11-30-2017 SFC2-to-SFC1 $100 distribution from SFC2's § 959(c)(3) E&P, constituting a specified payment, isn't disregarded under the second step of the ordering rule, it would be treated as a dividend. The priority rule in § 1.960-1(i)(2) provides that credits under § 960 are calculated before those under § 902. Section 960 credits would thus be calculated for a § 958(a) U.S. shareholder's § 965(a) inclusion before calculating effects of movement of foreign taxes accompanying the dividend. If, on the other hand, such distribution is disregarded under the second step of the ordering rule, presumably it's taken into account under the fourth step of the ordering rule — Prop. § 1.965-2(b)(4), which requires determining the treatment under § 959 of all distributions other than those described in the second step. The $100 distribution would then be treated potentially as a distribution of § 965(a) PTI; § 902 isn't directly implicated. The situation is even more complex if portions of an allocable share of an aggregate foreign E&P deficit is allocated.

We recommend that Treasury study this issue, and possibly clarify that specified payments determined under Prop. § 1.965-4(f)(1) are disregarded in step two, and thus are disregarded in determining post-1986 E&P of the SFC as of the 12-31-2017 E&P measurement date. Such disregarded specified payments would then be taken into account in the fourth step of the ordering rule.⁴

3. Recommendations in connection with Prop. § 1.965-4(c)(2), relating to disregard of certain entity classification elections

Prop. § 1.965-4(c)(2) provides a per se rule that a § 301.7701-3 an change-in-entity-classification election filed on or after 11-02-2017 is disregarded for purposes of determining the amounts of all § 965 elements of a U.S. shareholder if the election would, ignoring Prop. § 1.965-4(c)(2), change the amount of any § 965 element of the U.S. shareholder, regardless of whether the election is made with a principal purpose of making such change. A § 965 element includes any U.S. shareholder's § 965(a) inclusion amount.

We recommend Treasury withdraw the rule in Prop. § 1.965-4(c)(2) giving blanket disregard of all prescribed change-in-entity-classification elections, and replace it with a more focused rule. This is justified on the grounds that the policy underlying § 965 isn't undermined by consequences of certain of the prescribed elections.

For example, if an 11-30-2017 check-the-box election to treat an association as an entity disregarded from its owner is, under Prop. § 1.965-4(c)(2), disregarded, a consequence would be that any nominal distribution of property from the disregarded entity to its owner would be recognized and could thus give rise to gain under § 311(b). This gain would — if the distribution occurred in December, 2017, and the association is a DFIC — increase the (now regarded) association's § 959(c)(3) E&P, post-1986 E&P E&P, accumulated post-1986 E&P, and ultimately the § 965(a) earnings amount and the § 965(a) inclusion amount of the association. The deemed liquidating distribution of appreciated property triggered by a check-the-box election for an association cannot meaningfully be seen as an action designed to reduce post-1986 E&P. Accordingly, undoing the check-the-box election and thereby potentially increasing post-1986 E&P isn't justified on policy grounds. The blanket disregard of all prescribed change-in-entity-classification elections in Prop. § 1.965-4(c)(2) should be withdrawn and replaced with a more focused rule targeting situations designed to reduce post-1986 E&P of affected entities.

C. Recommendations in connection with cash pooling arrangements

U.S. multinational enterprises routinely conduct various forms of cash pooling, cash sweeps, revolving credit, and similar arrangements in the ordinary course of business, not motivated by U.S. federal income tax considerations. Typically, one or more CFCs acting as treasury centers borrow from related parties with cash surpluses and lend — in the form of term notes, credit facilities, and other mechanisms — to related parties needing cash. Such CFCs also provide related parties with cash pooling, hedging, and similar services. These arrangements provide many benefits,⁵ and generally aren't motivated by tax considerations. The federal tax treatment of treasury center activities conducted by CFCs is governed by several Code provisions and regulations.⁶

In the Proposed Regs, Treasury and the IRS rejected public comments (on the Notices) asking that proposed regulations provide that notional cash pooling arrangements are treated as creating intercompany receivables for purposes of § 965.⁷ The Proposed Regs asserted that the determination of whether transactions in a notional cash pooling arrangement are treated as occurring among participants in the arrangement, or between the participants and a third party, depends on application of federal income tax principles.⁸

We acknowledge that federal income tax principles should be used to determine characteristics of transactions in cash pooling (and similar) arrangements. We recommend, however, that Treasury and the IRS revise the Proposed Regs in light of certain unique problems that can arise under such arrangements in the context of the policy underlying § 965.

We recommend the Proposed Regs be modified to prevent double counting of cash. This could be done by clarifying that the net balance in a cash pool arrangement is the appropriate measure of a U.S. shareholder's (or a consolidated group's) cash. Similarly, if a SFC has several disregarded entities, each of which participates in a cash pooling arrangement, we recommend the Proposed Regs be modified to treat only the net balance as cash of the CFC. That is, for example, the Proposed Regs should ignore the fact that one disregarded entity may be a nominal “borrower” in such an arrangement, while another may be a nominal “depositor.”

D. Recommendations in connection with foreign income taxes deemed paid under § 960(a)(3) (as in effect 12-31-2017)

Prop. § 1.965-4(c)(1)(ii) provides that foreign income taxes deemed paid by a domestic corporation under § 960(a)(3) with respect to a distribution of § 965(a) PTI or § 965(b) PTI include only foreign income taxes paid or accrued —

We ask that Treasury clarify whether the requirement that the referenced PTI come from a lower-tier CFC applies to both § 965(a) PTI and § 965(b) PTI, or just to the latter.

More substantively, we recommend that Treasury reconsider the restriction imposed by Prop. § 1.965-4(c)(1)(ii) on application of § 960(a)(3). Treasury should — solely in the context of § 965 — consider relaxing application of § 960(a)(3) to allow it to apply to foreign income taxes paid or accrued by lower-tier foreign corporations with respect to distributions of the two referenced types of PTI (of course, even in this context, no credit would be allowed under § 960(a)(3) for foreign income taxes deemed paid under § 960(a)(1) with respect to the portion of the § 965(a) earnings amount reduced under §§ 1.965-1(b)(2) or 1.965-8(b)).

Acknowledging Treasury's general policy stance on application of § 960(a)(3) only to foreign income taxes imposed on upper-tier foreign corporations,⁹ we feel that policy considerations underlying § 965 warrant modification of application of § 960(a)(3) in the context of foreign taxes imposed on PTI created under § 965. In particular, the § 965(b) PTI of a DFIC represents the DFIC's allocable share of the aggregate foreign E&P deficits across all other related foreign corporation¹⁰ — regardless of the DFIC's position in a foreign corporate structure, or its functions, assets, and risks borne. Accordingly, in the context of § 965 a more relaxed application of § 960(a)(3) is warranted (or course, after reduction for the relevant “applicable percentage”).

E. Treasury should amend the Proposed Regs to clarify that post-1986 E&P excludes PTI

Treasury should amend the Proposed Regs to address a potentially harmful consequence flowing from a literal interpretation of the definition of “post-1986 earnings and profits” (“post-1986 E&P”) under § 965(d)(3).

The potentially harmful consequence flows from two definitions under § 965. The term “accumulated post-1986 deferred foreign income” (“accumulated post-1986 DFI”) of a foreign corporation is defined in § 965(d)(2) to mean, in essence, the post-1986 earnings and profits (“post-1986 E&P”) of that corporation except to the extent such earnings are attributable to ECI and subject to tax, or, in the case of a CFC, are previously taxed income (“PTI”) under 959(c)(1) or (c)(2). In turn, post-1986 E&P of a foreign corporation is defined in § 965(d)(3) to mean the E&P of the corporation accumulated in taxable years beginning after 12-31-1986 and determined as of either 11-02-2017 or 12-31-2017, as applicable, and without diminution by reason of dividends distributed during the inclusion year other than dividends distributed to another specified foreign corporation.

These two terms are of critical importance in determining the amount of income ultimately subject to tax by reason of the inclusion in § 965. That inclusion depends first on the the greater of the accumulated post-1986 DFI on 11-02-2017 and 12-31-2017 for a DFIC, but taking into account a reduction by the amount of aggregate foreign E&P deficit allocated to the DFIC. The “aggregate foreign E&P deficit” is defined in terms of the aggregate of the specified E&P deficits of the E&P deficit foreign corporations,¹¹ and “specified E&P deficits” are defined in terms of deficits in post-1986 E&P.¹²

Accumulated post-1986 DFI explicitly excludes § 959 PTI, but the definition of post-1986 E&P is silent on whether PTI is excluded. In the Proposed Regs, Treasury interprets this silence to mean that post-1986 E&P includes § 959 PTI. A consequence is that, for an SFC that has both § 959 PTI and a deficit in § 959(c)(3) E&P, the SFC only has a specified E&P deficit to the extent the § 959(c)(3) E&P deficit exceeds aggregate § 959 PTI.¹³

To see how this can lead to harmful consequences, consider the situation shown below left in Example 2A, in which CFC1 is an E&P DFC with a specified E&P deficit of $100. Under Prop. § 1.965-1(b)(2), USP's § 965(a) inclusion amount with respect to each of CFC2 and CFC3 is the § 965(a) earnings amount of each of CFC2 and CFC3 (i.e., $70)¹⁴ reduced by each CFC's allocable share of USP's aggregate foreign E&P deficit (i.e., $50 = ½ × $100). USP's § 965(a) inclusion amount with respect to each of CFC2 and CFC3 is thus $20, for a total § 965(a) inclusion amount for USP of $40.

Now consider the situation shown on the right below in Example 2B, involving the slight variation in which CFC1 now has — in addition to a § 959(c)(3) deficit of $100 — $60 of § 959(c)(2) PTI. The PTI is no longer in CFC2, where it was ignored. Instead, under Prop. § 1.965-1(f)(22)(ii), the specified E&P deficit of CFC1 is now only $40 ($100 § 959(c)(3) deficit net of $60 § 959(c)(2) PTI). USP's § 965(a) inclusion amount with respect to each of CFC2 and CFC3 is now the § 965(a) earnings amount of each (i.e., $70) reduced by each CFC's allocable share of USP's aggregate foreign E&P deficit (i.e., $20 = ½ × $40). USP's § 965(a) inclusion amount with respect to each of CFC2 and CFC3 is thus $50, for a total § 965(a) inclusion amount for USP of $100.

Example 2A results in USP being taxed on $40 ($20 for each of CFC2 and CFC3), which corresponds to the net untaxed earnings among the CFCs. No double taxable of foreign earnings arises. Example 2B, by contrast, results in USP being taxed on $100 ($50 for each of CFC2 and CFC3) even though there's only $40 of net untaxed earnings among the CFCs. Double taxation arises in Example 2B because USP is in effect being taxed twice on CFC1's $60 of PTI. Double taxation arises because CFC1's § 959(c)(3) deficit is — under Prop. § 1.965-1(f)(22)(ii) — being netted against its § 959 PTI.

Double taxation of PTI cannot have been the result intended by Congress in enacting § 965. The Conference agreement generally followed the Senate Amendment, and the Senate explained that a U.S. corporate shareholder of a foreign corporation “must include in income its pro rata share of the undistributed, non-previously-taxed post-1986 foreign earnings of the corporation.”¹⁵ The Conference Committee explained —

Treasury's grant of authority under § 965(o) can thus be read to extend to situations — like that in Example 2B above — in which double taxation of earnings can arise by virtue of a literal reading of § 965.

While § 965(o), in conjunction with language from the Conference Report, grants Treasury authority to write regulations addressing this unintended inequity, there is precedent outside § 965 for such action. For example, for deemed-paid foreign tax credit purposes, § 902(c) defines “post-1986 undistributed earnings” to mean E&P of a foreign corporation accumulated after 12-31-1986. There's no explicit carve-out for § 959 PTI of such corporation. But Treasury and the IRS exercised authority granted them under § 902(c)(8) — to provide such regulations “as may be necessary or appropriate to carry out the provisions of [§ 902]” — to write a regulation explicitly carving § 959 PTI out of post-1986 undistributed earnings.¹⁷ This regulatory exclusion of § 959 PTI prevents certain anomalies from arising when determining deemed paid foreign tax credits. A parallel exercise is clearly warranted under § 965.

We recommend Treasury and the IRS address the anomaly under § 965 by modifying the rule in Prop. § 1.965-1(f)(22)(ii) for determining a deficit in post-1986 E&P so that it doesn't require netting of § 959(c)(3) E&P deficits (including hovering deficits) against § 959(c)(1) and (c)(2) PTI.

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Appendix — SVTDG Membership

Accenture

Activision Blizzard

Acxiom

Adobe

Agilent

Airbnb

Amazon

AMD

Ancestry.com

Apple

Applied Materials

Aptiv

Arista

Atlassian

Autodesk

Bio-Rad Laboratories

BMC Software

Broadcom Limited

CA Technologies

Cadence

CDK Global

Chegg, Inc.

Cisco Systems, Inc.

Dell Inc.

DocuSign

Dolby Laboratories, Inc.

Dolby Laboratories, Inc.

Dropbox Inc.

eBay

Electronic Arts

Expedia, Inc.

Facebook

FireEye

Fitbit, Inc.

Flex

Fortinet

Genentech

Genesys

Genomic Health

Gilead Sciences, Inc.

GitHub

GLOBALFOUNDRIES

GlobalLogic

Google Inc.

GoPro

Grail, Inc.

Guidewire

Hewlett-Packard Enterprise

HP Inc.

Indeed.com

Informatica

Ingram Micro, Inc.

Integrated Device Technology

Intel

Intuit Inc.

Intuitive Surgical

Keysight Technologies

KLA-Tencor Corporation

Lam Research

Marvell

Maxim Integrated

MaxLinear

Mentor Graphics

Microsoft

NetApp, Inc.

Netflix

NVIDIA

Oath, A Verizon Company

Oracle Corporation

Palo Alto Networks

PayPal

Pivotal Software, Inc.

Pure Storage

Qualcomm

Red Hat Inc.

Ripple Labs, Inc.

Rubrik

salesforce.com

Sanmina-SCI Corporation

Seagate Technology

ServiceNow

Snap, Inc.

Stripe

SurveyMonkey

Symantec Corporation

Synopsys, Inc.

The Cooper Companies

The Walt Disney Company

TiVo Corporation

Trimble, Inc.

Twitter

Uber Technologies

Velodyne LiDAR

Veritas

Visa

VMware

Western Digital

Workday, Inc.

Xilinx, Inc.

Yelp