United States: IRS Notice 2018-26: Important New Guidance On The Mandatory Repatriation Tax

This document discusses Notice 2018-26, the third IRS Notice providing guidance on the new mandatory repatriation tax under § 965.

Most importantly, the Notice sets forth extensive anti-avoidance rules in respect of transactions that reduce a taxpayer's § 965 tax liability.  Generally, the rules apply a "principal purpose" test for determining whether a transaction is an avoidance transaction.  However, with limited exceptions, the rules presume that a transaction that occurs after November 2, 2017 and that in fact reduces a taxpayer's § 965 tax liability was undertaken with a bad purpose and, therefore, is disregarded for purposes of determining the taxpayer's § 965 tax liability.  Further, the rules treat a significant set of transactions per se as having been undertaken with a bad purpose.  Thus, the overall approach taken in these rules is very much like the approach taken in the § 385 regulations:  Assume a bad purpose first; ask questions later.  Calendar year taxpayers and their advisors will need to become familiar with this complex web of new rules very quickly to determine 2017 tax liability, payment of which is due April 17th.

Other portions of the Notice address various other issues under § 965, including the treatment of accrued foreign taxes, rules regarding the various elections available under § 965  and who can make them, the treatment of the § 965(c) deduction for AMT purposes, and relief from estimated tax penalties.  Treasury and the IRS are to be commended for providing common-sense rules in many of these areas.

Section 3.01:  Limited Relief from "Downward" Attribution

The Notice provides limited relief from § 318(a)(3) "downward attribution" in one extremely narrow situation involving attribution from a partner (the "tested partner") to a partnership.  Treasury and the IRS intend to issue regulations providing that if the tested partner owns less than 5% of the interests in the partnership's profits and capital, stock owned by the tested partner will not be treated as owned by the partnership for purposes of determining whether a foreign corporation is a specified foreign corporation (SFC) under § 965(e)(1)(B).  A slightly modified version of the § 318 attribution rules will apply to determine the interest in the partnership owned by the tested partner.

The Notice makes no reference to the Senate Print or the Conference Report statements that Congress generally did not intend the repeal of § 958(b)(4) to cause a foreign corporation to be treated as a CFC with respect to a U.S. shareholder as a result of downward attribution under § 318(a)(3) from a U.S. person that is unrelated to the U.S. shareholder.  We hope Treasury and the IRS will provide further relief from § 318(a)(3) consistent with Congressional intent.

Section 3.02:  Determination of Cash Measurement Dates Where Specified Foreign Corporation Is Acquired, Disposed of, or Ceases to Exist

The Notice provides rules to clarify a SFC's cash measurement dates described in § 965(c)(3)(A) if the U.S. shareholder does not own the SFC on all of the potentially relevant dates.  Treasury and the IRS intend to issue regulations providing that—

(i)  the "final cash measurement date," i.e., the close of the SFC's last taxable year that begins before January 1, 2018, is only taken into account if it is on or after November 2, 2017;

(ii)  the "second cash measurement date," i.e., the close of the last taxable year that ends before November 2, 2017, is only taken into account if it is after November 1, 2016;

(iii)  the "first cash measurement date," i.e., the close of the immediately preceding taxable year, is only taken into account if it is after November 1, 2015, and before November 2, 2016; and

(iv)  a U.S. shareholder must take into account is pro rata share of the SFC's cash position on each measurement date meeting these requirements only if the U.S. shareholder is a U.S. shareholder of the SFC on that date, regardless of whether the U.S. shareholder is a U.S. shareholder of the SFC on any other cash measurement date.

In an example, USP sold CFC2, a calendar year CFC, to an unrelated person on June 30, 2016.  USP takes into account CFC2's cash position only on CFC2's first cash measurement date, December 31, 2015.  USP also owned CFC4 until CFC4 dissolved on December 30, 2010.  USP does not take into account CFC4's cash position on any measurement date.

Section 3.03:  Treatment of Certain Accrued Foreign Income Taxes for Purposes of Determining Post-1986 E&P

The Notice provides some relief from the rule that foreign income taxes accrue only on the last day of the foreign tax year, as stated in Rev. Rul. 61-93, 1961-1 C.B. 390.  Absent this relief, a calendar-year SFC's E&P measured on November 2, 2017 might include 10 months (and two days) of 2017 earnings but no 2017 foreign income taxes.

Treasury and the IRS intend to issue regulations providing that, for purposes of determining a SFC's post-1986 E&P as of November 2, 2017, certain foreign income taxes will be allocated between the portions of the SFC's U.S. tax year that are before and after that date.  To qualify for allocation, the foreign income taxes must meet both of the following requirements:

(i)  the tax must accrue within the SFC's U.S. tax year that includes November 2, 2017, and

(ii)  the tax must accrue after November 2, 2017, but on or before December 31, 2017.

Thus, foreign income taxes will only be allocated if the SFC has a foreign tax year ending in November or December.

The contemplated regulations will be relevant solely for purposes of determining the SFC's post-1986 E&P within the meaning of § 965(d)(3).  For example, they will not affect the computation of deemed paid credits under §§ 902 or 960.

Comment:  We commend Treasury and the IRS for this rule. While limited in scope, it allows for a more accurate economic measurement of many CFCs' E&P as of November 2, 2017.

Section 3.04:  Anti-Avoidance Rules

Section 3.04(a)(i):  Overview of "Principal Purpose" Transactions

The Notice includes broad anti-avoidance rules.  Treasury and the IRS intend to issue regulations under sections 965(c)(3)(F) and 965(o) providing that a transaction will be disregarded for purposes of determining a U.S. shareholder's § 965 tax liability if the following conditions are satisfied:

(i)  the transaction occurs, in whole or in part, on or after November 2, 2017;

(ii)  the transaction is undertaken with a principal purpose of reducing the U.S. shareholder's § 965 tax liability; and

(iii)  the transaction would otherwise reduce the shareholder's § 965 tax liability.

The Notice refers to this three-part test as the "anti-avoidance rule."

For the purposes of the anti-avoidance rule, a transaction reduces a U.S. shareholder's § 965 tax liability if it (i) reduces the U.S. shareholder's § 965(a) inclusion amount, (ii) reduces the U.S. shareholder's aggregate foreign cash position, or (iii) increases the amount of foreign income taxes the U.S. shareholder is deemed to pay under § 960 as a result of an inclusion under § 965.

The Notice states that certain transactions, as further described below, are presumed to be undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  Any such presumption may be rebutted only if the facts and circumstances clearly establish that the transaction was not undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  The regulations will require that a taxpayer that takes the position that the presumption is rebutted must attach a statement to its income tax return disclosing that it has rebutted the presumption.  In other words, taxpayers are presumed guilty unless they disclose on their tax returns—and can prove—that they are innocent.

Comment:  The requirement that taxpayers must disclose on their tax returns that they have rebutted the presumption is excessive.  To comply, taxpayers would need to review every transaction that group companies have undertaken anywhere in the world, determine whether they are among the many transactions carrying a presumption of bad purpose, and then disclose on the return that the presumption has been rebutted.  This would be a burdensome exercise, and it is difficult to see what the IRS gains from it in terms of sound administration of the tax laws.  If a taxpayer failed to disclose a transaction that reduced § 965 tax liability, would the transaction automatically be treated as having been undertaken with a bad purpose, with no avenue for relief or rebuttal?

In addition, the Notice creates a significant set of transactions that are per se treated as undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  As a result, these per se transactions are automatically disregarded for purposes of determining the relevant U.S. shareholder's § 965 tax liability, if they would otherwise reduce the liability.

The anti-avoidance rule depends in several cases on whether a person is related to the U.S. shareholder.  For this purpose, a person is treated as related to a U.S. shareholder if the person bears a relationship to the U.S. shareholder described in § 267(b) or 707(b) immediately before or immediately after the transaction.

Section 3.04(a)(ii):  Cash Reduction Transactions

A cash reduction transaction is presumed to be undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  A "cash reduction transaction" is (i) a transfer of cash, accounts receivable, or cash equivalent assets by a SFC to any of its U.S. shareholders or a person related to a U.S. shareholder, or (ii) an assumption by a SFC of an account payable of any of its U.S. shareholders or a person related to a U.S. shareholder, if the transfer or assumption would otherwise reduce the U.S. shareholder's aggregate foreign cash position.  This presumption does not apply to a cash reduction transaction that occurs in the ordinary course of business.

The presumption will not apply to a cash reduction transaction that is a distribution by a SFC to a U.S. shareholder.  Such a distribution will be treated per se as not being undertaken with a bad purpose, unless the distribution is a specified distribution.  Thus, ordinary cash distributions from a CFC to its U.S. shareholder generally are not subject to the anti-avoidance rule, and thus will be given effect in determining the U.S. shareholder's § 965 tax liability.

A specified distribution, however, will be treated per se as being undertaken with a bad purpose, and will not be given effect for § 965 purposes if it reduces the U.S. shareholder's § 965 tax liability.  A "specified distribution" is a cash reduction transaction that is a distribution by a U.S. shareholder's SFC if (i) at the time of the distribution, there was a plan or intention for the distributee to transfer, directly or indirectly, cash, accounts receivable, or cash equivalent assets to any SFC of the U.S. shareholder, or (ii) the distribution is a non pro rata distribution to a foreign person that is related to the U.S. shareholder.

Comment:  Clause (i) of the "specified distribution" definition is excessively broad.  For example, a cash distribution of $1 billion from CFC1 could be viewed as tainted if, at the time of the distribution, the U.S. shareholder has a separate and unrelated plan to transfer $100 to CFC2 in the ordinary course of business.  The definition ought to be rewritten to provide that a distribution will be a specified distribution only to the extent of the plan to retransfer cash or equivalents to a CFC, and only if the distribution and the retransfer are somehow related.  In the example, none of the $1 billion (or, at most, $100) should be a specified distribution.

Additionally, we understand the "distributee" identified in clause (i) to mean the particular U.S. shareholder receiving the distribution, and not, for example, a member of the shareholder's consolidated group. It would be helpful if Treasury and the IRS confirmed this point.

Section 3.04(a)(iii):  E&P Reduction Transactions 

An E&P reduction transaction is presumed to be undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  An "E&P reduction transaction" is a transaction between a SFC and any of the following:  (i) any of its U.S. shareholders, (ii) another SFC of any of its U.S. shareholders, or (iii) any person related to any of its U.S. shareholders, if the transaction would otherwise reduce the accumulated post-1986 deferred foreign income or the post-1986 undistributed earnings under § 902(c)(1) (as in effect before its repeal by TCJA) of the SFC or another SFC of any of its U.S. shareholders.  However, this presumption does not apply to an E&P reduction transaction that occurs in the ordinary course of business. 

Notwithstanding the presumption, an E&P reduction transaction that is a specified transaction will be treated per se as being undertaken with a bad purpose.  A "specified transaction" is a transaction that involves (i) a complete liquidation of a SFC to which § 331 applies; (ii) a sale or other disposition of stock by a SFC, or (iii) a distribution by a SFC that reduces its E&P pursuant to § 312(a)(3). 

Comment:  Treasury and the IRS attempted to limit this per se rule, but, as currently drafted, it picks up transactions that have nothing to do with tax avoidance.  For example, a simple § 351 drop‑down of stock would be covered, as would a § 355 distribution.  Suppose the U.S. parent happens to be spinning off a business in 2018.  The spin-off will necessarily involve numerous stock drop-downs and § 355 internal distributions by various CFCs.  These transactions should be excluded from the per se E&P reduction rule if the parent can demonstrate they are unrelated to § 965 planning.

Section 3.04(a)(iv):  Pro Rata Share Transactions

A pro rata share transaction is also presumed to be undertaken with a principal purpose of reducing a U.S. shareholder's § 965 tax liability.  A "pro rata share transaction" is a transfer of a SFC's stock to any of its U.S. shareholders or a person related to any of its U.S. shareholders if such transfer would otherwise (i) reduce the U.S. shareholder's pro rata share of the SFC's § 965(a) earnings amount if it is a deferred foreign income corporation, (DFIC); (ii) increase the U.S. shareholder's pro rata share of the SFC's specified E&P deficit if it is an E&P deficit foreign corporation; or (iii) reduce the U.S. shareholder's pro rata share of the SFC's cash position.

Notwithstanding the presumption, an internal group transaction will be treated per se as being undertaken with a bad principal purpose.  An "internal group transaction" is a pro rata share transaction if, immediately before or after the transfer, the transferor and the transferee of the SFC's stock are members of an affiliated group in which the U.S. shareholder is a member.

For this purpose, the term "affiliated group" has the meaning set forth in § 1504(a), determined without regard to paragraphs (1) through (8) of § 1504(b).  Additionally, for purposes of identifying an affiliated group and the members of the group, (i) each partner in a partnership (as determined without regard to clause (ii) below) is treated as holding its proportionate share of the stock held by the partnership, and (ii) if one or more members of an affiliated group own, in the aggregate, at least 80% of the interests in a partnership's capital or profits, the partnership will be treated as a corporation that is a member of the affiliated group.

Anti-Avoidance Example

The Notice provides one example of its anti-avoidance rules.  In the example, FP, a foreign corporation, owns 100% of USP, a domestic corporation, which has owned 100% of FS, another foreign corporation, for more than one year.  The taxable year end is December 31 for USP and November 30 for FS. 

On January 2, 2018, USP transfers all of FS's stock to FP for cash.  On January 3, 3018, FS makes a distribution with respect to its stock to FP.  USP treats the transaction as a taxable sale of FS stock and claims a dividends received deduction under § 245A with respect to the deemed dividend under § 1248(j) as a result of the sale.  FS has post-1986 E&P as of December 31, 2017, and no previously taxed income or effectively connected income for any previous taxable year.

The Notice states that the transfer of FS stock is a pro rata share transaction, because the transfer is to a person related to USP, and the transfer would otherwise reduce USP's pro rata share of FS's § 965(a) earnings amount.  The transfer of FS stock is also an internal group transaction, because USP and FP are members of an affiliated group.  Therefore, this transaction is treated per se as being undertaken with a principal purpose of reducing the § 965 tax liability of USP.

Thus, the transfer will be disregarded for purposes of determining USP's § 965 tax liability with the result that, among other things, USP's pro rata share of FS's § 965(a) earnings amount is determined as if USP owned 100% of the stock of FS on the last day of FS's inclusion year and no other person received a distribution with respect to this stock during that year.

Comment:  Once again, the per se category is overbroad.  Tax avoidance is not always the reason for an intragroup stock transfer.  Simple § 351 drop-downs and § 355 distributions of SFC stock in particular should not automatically be treated as bad purpose transactions if the taxpayer can demonstrate an unrelated purpose.

Section 3.04(b):  Changes in Method of Accounting and Entity Classification Elections

In addition, Treasury and the IRS intend to issue regulations providing that any change in method of accounting made for a taxable year of a SFC that ends in 2017 or 2018 will be disregarded for purposes of determining a U.S. shareholder's § 965 tax liability if such change would otherwise reduce the liability.  These regulations will not apply to a change in method of accounting for which the original and/or duplicate copy of any Form 3115 requesting the change was filed before November 2, 2017.

The regulations will also provide that any entity classification election under Treas. Reg. § 301.7701-3 filed on or after November 2, 2017, will be disregarded for purposes of determining a U.S. shareholder's § 965 tax liability if the election would otherwise reduce the liability.  This rule will apply even if the entity classification election was effective before November 2, 2017.

These rules will apply regardless of whether the change in method of accounting or entity classification election is made with a principal purpose of reducing the § 965 tax liability of a U.S. shareholder.

Comment:  The automatic denial of accounting method changes and entity classification elections for 14 months is overbroad, and the "heads I win, tails you lose" approach of only disregarding transactions when they reduce the § 965 tax liability (while giving them full effect when they increase tax liability) is offensive.  Common accounting method changes should be excluded from this broad rule, as should method changes deemed to occur by reason of a change in law (for example, the new tax-book conformity rule under § 451(b)) or a change in GAAP accounting principles​.  Treasury and the IRS have not written anti-avoidance rules "to carry out the provisions of § 965"as § 965(o) mandates; they have turned the statute on its head, making it into one giant anti-avoidance rule.  This cannot be what Congress intended.

Section 3.05:  Elections, Reporting, and Payment

Section 3.05(a):  Documentation of Cash Position

The IRS intends to issue forms, publications, regulations or other guidance that will specify the documentation a U.S. shareholder must maintain and provide to demonstrate that net accounts receivable, actively traded property, and/or short-term obligations may be excluded from the shareholder's aggregate foreign cash position under § 965(c)(3)(D) because they have been taken into account by the shareholder with respect to another SFC.

Section 3.05(b):  Rules and Elections in the Case of a Domestic Pass‑Through Entity

The Notice provides rules for the application of § 965 to a domestic pass‑through entity and its U.S. owners, including who may make § 965 elections.

Treasury and the IRS have determined that if a domestic pass-through entity is a U.S. shareholder of a DFIC, the § 965(a) inclusion and the § 965(c) deduction should be determined at the level of the domestic pass-through entity.  However, domestic owners of the entity are subject to federal income tax on their shares of the pass-through entity's inclusion amount.  The § 965(a) inclusion and the § 965(c) deduction must be allocated to the owners of the pass‑through entity in the same proportion.

If a domestic owner of the domestic pass-through entity is a U.S. shareholder with respect to the DFIC and separately owns § 958(a) stock in the DFIC, the regulations will provide that the owner's § 965(a) inclusion amount and § 965(c) deduction with respect to the separately owned stock will be determined separately from the owner's share of the § 965(a) amount and § 965(c) deduction of the domestic pass-through entity.

A "pass-through entity" for this purpose means a partnership, an S corporation, or any other person to the extent the person's income or deductions are included in the income of one or more direct or indirect owners or beneficiaries.  Special rules are provided in the case of tiered pass-through entities.

With respect to the elections under § 965(h), (m), and (n), Treasury and the IRS intend to issue regulations allowing a domestic pass-through owner to make these elections regardless of whether the domestic pass-through owner is a U.S. shareholder of the DFIC.  Any such election will generally apply to all § 965(a) inclusion amounts of the domestic pass-through owner.  A domestic pass-through owner that is an S corporation will be allowed to make an election under § 965(i) to defer tax liability with respect to a DFIC owned by the pass-through entity only if the S corporation is a U.S. shareholder of the DFIC owned by the pass-through entity.

Section 3.05(c):  Net Tax Liability of Domestic Pass-Through Owners for Purposes of Section 965(h)

Treasury and the IRS intend to issue regulations providing that for purposes of determining a domestic pass-through owner's net tax liability under § 965, the domestic pass-through owner will be treated as a U.S. shareholder.  Thus, the domestic pass-through owner will be able to elect, under § 965(h), to pay the liability in installments.

The regulations will provide that in the case of a taxpayer with one or more elections in place under § 965(i), the taxpayer's net tax liability under § 965 for purposes of § 965(h) will be reduced by the taxpayer's net tax liabilities deferred under § 965(i).

Section 3.05(d):  Application of Section 965(n)

Treasury and the IRS intend to issue regulations providing that, if an election is made under § 965(n), then, pursuant to § 965(n)(1)(A), the amount of an NOL for the year will be determined without taking into account as gross income the amount described in § 965(n)(2).  The regulations will also clarify that such an election will be treated as made with respect to both the amount of the NOL for the year and the NOL carryovers and carrybacks to the year.

Section 3.05(e):  Filing and Payment Dates for Certain Individuals

The Notice clarifies that in the case of an individual who, under Treas. Reg. § 1.6081-5(a)(5) or (6), qualifies for an automatic extension of time to the 15th day of the 6th month following the close of the taxable year to file a tax return and pay the resulting tax liability, the installment payments under § 965(h) will also be due by the 15th day of the 6th month following the close of a taxable year.

Section 3.06:  Treatment of Section 965(c) Deduction of Individuals

Treasury and the IRS intend to issue regulations providing that the § 965(c) deduction will not be treated as an itemized deduction, and thus will not be subject to the 2% floor or the AMT.

Comment: This is a helpful clarification. Congress certainly did not intend that individuals be taxed at AMT rates on income inclusions under § 965(a).

Section 4:  Modification of Accounts Receivable and Accounts Payable Definitions in Notice 2018-13

Treasury and the IRS intend to issue regulations modifying the definition of the terms "account receivable" and "account payable" in Section 3.04 of Notice 2018-13.  The regulations will provide that "accounts receivable" and "accounts payable" will only include receivables and payables with an initial term of less than one year.

Section 5:  Elections Under Section 962

Treasury and the IRS intend to issue regulations clarifying that a domestic pass-through owner who is an individual (including, as provided in Treas. Reg. § 1.962-2(a), a trust or estate) and is also a U.S. shareholder with respect to a DFIC may make a § 962 election with respect to the individual's share of the § 965(a) inclusion amount of a domestic pass-through entity with respect to the DFIC.  However, an individual who is not a U.S. shareholder of the DFIC will not be permitted to make the election.  The regulations will also clarify that the same principles apply to Subpart F inclusions other than by reason of § 965.

Treasury and the IRS also intend to modify Treas. Reg. § 1.962-1(b)(1)(i) to provide that, in computing the amount of tax due as a result of a § 962 election, the § 965(c) deduction may be taken into account.  Specifically, the regulations will provide that "taxable income" as used in § 11 will be reduced by the § 965(c) deduction (but not by any other deductions).  Additionally, any § 965(c) deduction allowed in determining "taxable income" as used in § 11 as a result of a § 962 election will not also be allowed for purposes of determining an individual's actual taxable income.

Section 6:  Penalty Waiver

The IRS will waive estimated tax penalties under §§ 6654 and 6655 with respect to a taxpayer's net tax liability under § 965, whether or not the taxpayer elects under § 965(h) to pay the liability in installments.  Other penalties may apply, however, if a taxpayer fails to pay the net tax liability under § 965 when due.

In addition, to the extent the TCJA amendment to § 965 or repeal of § 958(b)(4) causes an underpayment of estimated tax due on or before January 15, 2018, the estimated tax penalties under §§ 6654 and 6655 will not apply to that underpayment.​​​​​​​​​​​​​​​​​​

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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