We have, at times, developed innovative tax saving plans for clients. When the IRS challenges such a plan on audit, the IRS sometimes realizes that the plan is solid, and the IRS can not win the case in court. At that point, the IRS will often seek to have Congress change the law. This happened with one of our methods of transferring assets to a foreign subsidiary. The IRS did not take the case to court, but instead had Congress enact Section 367(c)(2) of the Internal Revenue Code to create a “deemed exchange” when a U.S. company transfers assets to a foreign subsidiary it already owns.