Why is this one so much more technical than the others?

Because it lives entirely inside US reorganisation law rather than in a mismatch between two countries. There is no haven, no royalty chain, no shell in Bermuda. It is a careful use of how the United States treats a specific type of corporate share swap, which is why it took a long sequence of IRS notices and finally a detailed regulation to shut it.

It was a technique available to foreign-parented groups with both US and foreign subsidiaries, used to repatriate offshore earnings into the US group cheaply. The IRS pursued it as a class of transaction across multiple notices over nearly two decades rather than singling out one company in public, which is why this entry describes the mechanism rather than naming a user.

The Killer B, Explained

ByLoopholeKiln EditorialPublished17 June 2026

Figures current as of1 January 2026·Corrections

← The Named Tax Structures, Explained: Double Irish, Dutch Sandwich, Single Malt and the Rest

The Killer B is a technical one, and its nickname tells you the point: it "killed" a tax charge that should have applied. It used a triangular reorganisation, a three-way share swap, to let a foreign-owned group move untaxed offshore cash into its US arm without triggering the dividend tax that would normally apply. The United States closed it with final regulations in July 2024.

What it is

A planning technique under US tax law using a particular kind of reorganisation, a "Type B" triangular reorganisation under section 368(a)(2)(E), combined with the rules in section 367(b). Foreign multinationals used it to bring the accumulated earnings and profits of a foreign subsidiary into the United States without the US tax that a normal dividend would carry. The "B" is the type of reorganisation; the "Killer" is what it did to the tax bill.

How it works, step by step

A foreign parent company owns both a US company and a foreign subsidiary.
In a Type B reorganisation, the foreign subsidiary acquires shares in the US company, paying for them with its own property, typically the cash it has built up offshore and never had taxed.
Under the reorganisation rules, the exchange of the foreign subsidiary's property for the US company's shares is treated as a non-recognition transaction, meaning no immediate US tax falls due.
The practical effect is that the foreign subsidiary's offshore earnings have been moved into the US group, but without the dividend tax that would normally apply when a foreign subsidiary distributes profit up to a US parent. The cash arrives; the tax does not.

Is it still open, and when did it close

Closed. The Internal Revenue Service attacked Killer B transactions through a series of notices in 2006, 2014 and 2016. The matter was settled with final regulations under section 367(b), issued on 17 July 2024. Those regulations recharacterise the foreign subsidiary's exchange of property as a deemed distribution from the subsidiary to the foreign parent, which triggers exactly the US tax the structure was designed to avoid. The technique no longer works.

Sources