IRS Announces Guidance to Clarify 'Corporation' for Section 1061: Today, the IRS issued Notice 2018-18 which announces that that the Treasury Department and the IRS intend to issue regulations on section 1061 as enacted by P.L. 115-97. These regulations will provide that the term “corporation” for purposes of section 1061(c)(4)(A) does not include an S corporation. The effect of the regulations would be that a carried interest held through an S corporation would be subject to the new three-year holding period to qualify for capital gains rates. The notice provides that the regulations are intended to be effective for taxable years beginning after December 31, 2017.