Companies continue to be pressured to move away from the conglomerate model and toward simplified and targeted strategies and risk profiles....more
In two rulings dated May 21, 2025 (II R 31/22, II R 56/22), the Federal Fiscal Court (BFH) ruled on important individual questions regarding the scope and requirements for real estate transfer tax exemption in the case of...more
In a terse notice released on September 29, the IRS and Treasury Department announced that they would withdraw the controversial proposed regulations governing spin-offs, split-offs and reorganizations that were released...more
The U.S. government has withdrawn a set of controversial proposed regulations issued near the end of the prior administration, which would have imposed significant new substantive and procedural requirements on taxpayers...more
As we previously discussed (here and here), the biotech mergers and acquisitions market currently faces significant headwinds. These challenges include frozen capital markets, regulatory uncertainty at the Food and Drug...more
These proposed regulations applicable to tax-free spin-offs would impose a range of new substantive requirements and greatly expand the information that must be reported to the Internal Revenue Service ("IRS") by taxpayers...more
On January 16, 2025, the Treasury Department (Treasury) and Internal Revenue Service (IRS) published new proposed regulations related to tax-free spin-offs and split-offs (collectively, spin-offs) and other corporate...more
On January 13, 2025, the U.S. Treasury Department (the “Treasury”) and the Internal Revenue Service (the “IRS”) issued proposed regulations (REG-112261-23 and REG-112261-24) adding and amending parts of the regulations...more
On January 13, the U.S. Treasury and Internal Revenue Service released long-awaited proposed regulations governing the treatment of certain features of tax-free corporate spin-off and split-off transactions. The IRS and...more
Spin-offs have become increasingly popular with innovative companies as a method of unlocking shareholder value, but the transaction is not always tax-free, particularly for international employees holding equity awards or...more
As central banks continue their campaign to cool inflation, interest rates remain at elevated levels not seen in well over a decade. For companies, this makes funding growth initiatives and refinancing existing debt much more...more
Artificial intelligence is not just about chatbots. Increasingly, it is used by government for enforcement, and boards need to prepare for that, just as they need to get ready for upcoming climate disclosure requirements....more
On May 1, 2024, the Treasury Department (Treasury) and Internal Revenue Service (IRS) released Revenue Procedure 2024-24 (Revenue Procedure), which sets out substantially revised guidelines for private letter ruling (PLR)...more
In an article last year, we discussed the increased pressure companies face to separate businesses that are not deemed “core,” and why tax-free spin-offs and similar transactions may be the most appealing way to achieve this....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
Over the last three months, public statements by U.S. Treasury and Internal Revenue Service officials have suggested that they are in the process of significantly revising the rules governing tax-free spin-offs, split-offs...more
On January 2, 2024, the Internal Revenue Service (IRS) released two revenue procedures updating the IRS guidelines for private letter ruling (PLR) requests, Revenue Procedure 2024-1 and Revenue Procedure 2024-3 (the 2024...more
With the rise in inflation and downturn in economies, spin-offs have become an increasingly popular method of unlocking shareholder value in a down market. Often, the ability to obtain tax-free treatment in the U.S. for the...more
In recent years, in the boardrooms of public companies with multi-line businesses, there have been few louder drum beats than those from investors calling for divestitures, spin-offs or other separation transactions aimed at...more
On November 18, 2022, the Internal Revenue Service (IRS) published private letter ruling 202246008 (the PLR), which concluded that a transaction qualifies as a tax-free spin-off under Section 3552 despite the fact that the...more
Sibling Rivalry- You have probably encountered family-owned corporations in which the founder’s offspring are involved in the business to varying degrees. They may even own some equity, typically having received such equity...more
Corporate reorganizations and spin-off transactions are transactions where there is often a great deal of incentive to qualify for tax-free treatment. In many cases, the amount of tax at issue justifies obtaining a private...more
Takeaways - Tax law changes in the Build Back Better Act (BBBA) would limit the amount of value a company could extract in a spin-off by using a debt-for-debt exchange. Companies may be able to achieve most of the...more
If enacted in its present form, the Build Back Better Act (BBBA) would amend the U.S. tax code’s rules for tax-free spin-off and split-off transactions (spin-offs), imposing significant restrictions on a parent company’s...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