NatWest decision prevents IRS adjustments of US branch's interest deductions : impact on capital allocation

The article provides a comprehensive overview on the two well-known US NatWest decisions. According to these decisions, the government must respect the US branch's records and the facts and circumstances of all transactions to determine the profits of the branch. The IRS may not allot additional capital to the branch unless equity has been allocated to the branch and the books inaccurately reflect this infusion as a loan.