On December 29, 2023, the IRS issued a generic legal advice memorandum (GLAM) asserting its position that “implicit support” should be considered when analyzing arm’s-length interest rates on intragroup loans based on the U.S. transfer pricing rules promulgated under Section 482 of the Internal Revenue Code. Given that many PE (and other) funds rely on intragroup loans as part of leveraged blocker tax structures used to optimize tax treatment for certain investors (e.g., offshore investors), it is worth considering how the interest rates on those loans may be impacted by the IRS’ guidance. This guest article by Kroll, Inc. director Zachary Held, and managing directors Stefanie Perrella and Sherif Assef, summarizes the concept of implicit support and the significance of the GLAM; the array of frameworks from tax authorities and credit ratings agencies for quantifying the impact of imputed support; specific contexts in which implicit support could, or could not, be found in PE fund structures; and open questions that fund managers need to weigh going forward. For coverage of other tax-related issues, see “Hot Topics in Tax and Negotiating Tips for Private Fund LPs (Part One of Two)” (Aug. 10, 2023); and “Key Withholding, PTP and Other Tax Considerations in Secondary Transactions” (Feb. 23, 2023).