New consolidated return regulations provide that certain intercompany obligation transactions are subject to deemed satisfaction and reissuance rules unless specified exemptions apply.

This edition of What's News in Tax explores a narrow requirement to apply one of the exceptions (the "intercompany extinguishment transaction exception") to the deemed satisfaction and reissuance rule under the new regulations.

An understanding of the requirement illuminates the IRS's long-standing apparent view that a single taxpayer can be deemed to be engaged in a taxable transaction with itself.