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further observed that the proliferation of revenue rulings,
revenue procedures, and letter rulings determining or relating to
the classification for Federal tax purposes of limited liability
companies and partnerships formed under State law had made the
existing classification regulations unnecessarily cumbersome to
administer, and the resulting complexities risked leaving small
unincorporated organizations with insufficient resources and
expertise to apply the current classification regulation to
achieve the organization’s desired classification. Id. The
Commissioner also stated that, because the same types of concerns
“are mirrored in the foreign context,” the IRS and Treasury “are
considering simplifying the classification rules for foreign
organizations”. Id. at 298. Notice 95-14 invited comments and
scheduled a public hearing. Id. at 299.
In 1996, the written comments and public hearing were
followed by the issuance of, first, proposed and, then, final
classification regulations. See PS-43-95, Proposed Income Tax
Regs., 61 Fed. Reg. 21989 (May 13, 1996) (the proposed
regulations); T.D. 8697 (December 18, 1996), 1997-1 C.B. 215 (the
final regulations). The classification regulations are commonly
referred to as the “check-the-box” regulations because of their
elective feature. See, e.g., Schler, “Initial Thoughts on the
Proposed ‘Check-the-Box’ Regulations”, 71 Tax Notes 1679 (June
17, 1996).
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