The US Department of the Treasury (Treasury Department) and the IRS recently released Revenue Procedure 2024-24 (Revenue Procedure) and Notice 2024-38 (Notice) establishing revised standards and procedures for taxpayers...more
The Internal Revenue Service ("IRS") recently issued important guidance identifying new positions the IRS is considering on critical aspects of tax-free spin-offs, and significantly expanding the information that taxpayers...more
On December 27, 2022, the IRS issued two notices providing key initial guidance for the new excise tax on corporate stock buybacks and the new corporate alternative minimum tax (CAMT). Both the excise tax and the CAMT were...more
Brief commentary on the past week’s cases, rulings, notices, and related federal tax guidance. Corporations Permitted to Rely on Public Shareholder Data to Confirm Qualification for Tax-Free Spin-off and Subsequent Merger...more
In a 5-4 decision, the U.S. Supreme Court has ruled that federal courts can review decisions by the U.S. Railroad Retirement Board denying claimants’ requests to reopen prior benefits denials. Salinas v. U.S. R.R. Ret. Bd.,...more
On February 3, 2021, the U.S. Supreme Court decided Salinas v. United States Railroad Retirement Board, No. 19–199, holding that a refusal by the U.S. Railroad Retirement Board to reopen a prior benefits determination is...more
On February 28, 2020, the Internal Revenue Service (IRS) released private letter ruling 202009002 (the PLR), which concluded that an absence of income does not, under the facts of the PLR, prevent a line of business from...more
A couple of months back, a local business reporter asked whether I could identify one kind of corporate transaction that was occupying more of my time than any other. When I asked whether they were referring to any specific...more
The Break-Up- After a tense period of disagreement and stalemate, the threaten of litigation, the ensuing economic and emotional stress, Client and their former fellow-shareholder (“Departing”) – and onetime friend, before...more
On May 17, 2019, the Internal Revenue Service (IRS) published private letter ruling 201920008 (the PLR), which concluded that a transaction qualifies as a tax-free spin-off under Section 355 despite the fact that the...more
In our recent article on spin-offs (click here), we discussed an announcement made by the Internal Revenue Service (IRS) signaling a change in the application of the active trade or business (ATB) requirement under Section...more
Our Federal Tax Group considers ways to pass the inscrutable device prohibition in the Section 355 rules. - An “out” from device - How about a Morris Trust transaction? - Where does the cash come in?...more
The “five-year active trade or business” or “ATB” requirement of section 355 is notorious for defeating many otherwise promising tax-free spin-off transactions. Consider the following common scenarios... Originally...more
On September 25, 2018, the IRS announced that it is undertaking a study regarding the application of the five-year active trade or business requirement of Section 355(b) (the “ATB Requirement”) to entrepreneurial ventures...more
On September 25, 2018, the Internal Revenue Service (the IRS) released a statement announcing a study of the "active trade or business" test for tax-free spin-offs under Section 355 (the ATB Test), as applied to...more
Sometimes, it becomes necessary for a corporation to be divided, in which a shareholder or a group of shareholders would separate from the corporation and take with them a business division, unit or location. Parties...more
New Campaigns Announced - On March 13, 2018, the Large Business and International (LB&I) Division of the Internal Revenue Service (IRS) announced five new compliance campaigns. The five campaigns supplement the 13 initial...more
In a new 18-month pilot program, the IRS is temporarily opening up a previous no-rule policy with respect to certain issues arising in a distribution by a corporation to its shareholders under Section 355....more
On September 21, 2017, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2017-52 (the “Rev. Proc.”), introducing an 18-month “pilot program” in respect of corporate “spin-off,” “split-up” and “split-off”...more
The U.S. Treasury Department and the Internal Revenue Service published on January 18, 2017 final regulations (the “Final Regulations”) reducing from ten years to five years the recognition period for the corporate-level tax...more
In December, the Treasury published temporary and proposed regulations clarifying the application of Section 355(e) when the distributing (D) corporation or the controlled (C) corporation has a predecessor (P) or...more
Section 385 Proposed Regulations — Impact on Related-Party Financing - Section 385 has been in the Internal Revenue Code since 1969. It was enacted to provide guidance for whether to classify an interest in a corporation...more
The active trade or business rules are detailed and highly fact specific, and the IRS continues to refine its view on the qualification requirements. In order to separate two businesses housed in one corporation or in a...more
This recent ruling by the IRS is significant for what it does not say. It does not say much of anything. It is a “significant issue” ruling, which is a type of limited ruling issued by the Corporate Division of Chief...more
The U.S. Internal Revenue Service (“IRS”) released Revenue Procedure 2016-45 (the “Revenue Procedure”) on August 26, 2016, permitting taxpayers once again to seek private letter rulings on issues of “corporate business...more