Final regulations under section 7701 of the Code contain special rules regarding the entity classification of certain foreign business entities, including a special rule that terminates the grandfathered status of certain foreign business entities upon a 50-percent change of control, and a special rule that clarifies and further modifies the relevancy rules relating to certain foreign eligible entities.

This announcement contains a withdrawal of proposed regulation section 301.7701-3(h), which provided a rule that would have operated to change the classification of a foreign disregarded entity if a so-called "extraordinary transaction" occurred one day before or within one year after the election to treat the entity as disregarded. REG-110385-99 partially withdrawn.